The media mogul John Malone has lost his bitter legal battle to oust Barry Diller from the helm of the IAC/Interactive internet conglomerate, home to the Ticketmaster ticket agency and Ask.com search engine.
The ruling came two weeks after the conclusion of an extraordinary trial when the men, two of the most powerful and celebrated in the media industry, attacked each other from the witness box.
Mr Malone owns a controlling stake in IAC through his company, Liberty Media, but handed the voting power of the shares over to Mr Diller in a pact that goes back more than a decade. At trial, Liberty claimed Mr Diller's plans to split IAC into five separate companies broke the terms of the pact, allowing Mr Malone to seize back control of the company.
In a 78-page ruling late yesterday, Delaware judge Stephen Lamb said Liberty had failed to prove Mr Diller's break-up plan breached the terms of their agreement.
Mr Malone – a cable industry mogul whose ruthless dealmaking style earned him the nickname Darth Vader – may still be able to block the break-up if Judge Lamb rules at a later date that board approval violates directors' fiduciary duty to protect shareholders.
However, IAC shares jumped on yesterday's ruling, as after-hours traders bet that the plan will now go ahead.
"I wish this hadn't happened, but it did," Diller told Bloomberg after the ruling. "Now it's over and we can all get on with our work and lives."
Media industry observers were astonished that the feud between messrs Malone and Diller ended up in court. Many had predicted the attempt to oust Mr Diller was in fact a negotiating tactic, aimed at winning a deal that would hand Liberty some of IAC's main businesses on favourable terms, in return for a dissolution of their business relationship. During the hearings, it was revealed Liberty was in talks to acquire some IAC assets, which analysts said were likely to include the Home Shopping Network, which Mr Malone could profitably merge with QVC, which he already owns.
However, the five-day trial featured vitriolic comments from the witness box, as Mr Malone questioned Mr Diller's trustworthiness and the way he ran IAC as a personal fiefdom. A $275m (£138m) fee Mr Diller reaped as a consultant in a deal involving Vivendi "raised eyebrows", Mr Malone said, and he noted the fee was on top of $1.1bn in compensation from IAC since 2000.
Days later, Mr Diller criticised Mr Malone's reliance on Liberty chief executive Greg Maffei, calling him an "irresponsible executive" who "for over a year and a half, has spoken badly about our businesses and our managers".
The break-up of IAC is the latest attempt to end years of poor share price performance by the conglomerate. It has been a disappointing latest chapter in Mr Diller's media career, having failed to become the internet industry giant envisaged when the former Paramount Studios boss began to build the company through an acquisition spree 13 years ago.Reuse content