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Jun 10, 2002  •  Post A Comment

Diller delays plans to acquire USA Interactive subsidiaries
Barry Diller’s USA Interactive did an about-face June 6 when it said it will delay plans to acquire the remaining stakes in three of the publicly traded subsidiaries it already controls. It had announced those plans days earlier. Investors found the use of USA Interactive’s undervalued stock to overpay for the overvalued subsidiaries insulting, Mr. Diller told the press.
USA Interactive said it wants to acquire the remaining shares it does not own of Ticketmaster, Hotels.com and Expedia for $4.1 billion, or a 7.5 percent premium. Despite initial lackluster investor response, Mr. Diller said the move, which he still hopes to make at a later date, will make the operation and expansion of the companies more efficient and stronger.
“We in no way regard our action today as `hostile.’ … USA Interactive has potential for dramatic growth, which would only be enhanced by the realignment we propose,” Mr. Diller said.
Analysts generally approved of the move, although it initially will dilute earnings, shaving as much as $5 off of Prudential Securities’ 12-month target price of $40 for the company, according to analyst Katherine Styponias. Mr. Diller is expected to use the stock as deal currency.
Cash-poor Adelphia still trying to sell its Los Angeles systems
Embattled Adelphia Communications could still seek bankruptcy protection, even though such plans were postponed at a June 1 board of directors meeting. The company still is exploring ways to sell cable systems in Los Angeles and elsewhere to pay off debt. Charter Communications has broken off negotiations to buy some of those systems over vast differences in price. However, Adelphia only has enough cash to operate for several more weeks before more dramatic action must be taken.
The Securities and Exchange Commission, major shareholders, lawyers and grand juries in two states are trying to unravel the complex deals behind $2.3 billion in loans to the company’s founding Rigas family, which has since relinquished its control.
Embattled Messier got big bonus while Vivendi Universal faltered
Vivendi Universal’s embattled Chairman Jean-Marie Messier received nearly $5 million in bonus and stock options in 2001, when the company reported a record loss, according to a detailed filing. The disclosure seems ill -timed since Vivendi Universal stock is off by more than 50 percent this year and key shareholders have called for Mr. Messier’s resignation.
Earlier this week, John Malone, chairman of Liberty Media Corp., indicated he may sell off Liberty’s 3.5 percent stake in Vivendi Universal. That announcement sent the stock price down another 4 percent. Edgar Bronfman Jr., whose family is considering selling off some of its 5.3 percent stake in the company even at depressed prices, recently assumed more of a check-and-balance role regarding Mr. Messier.