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Malone, Liberty Respond To IAC Suit, Accuse Diller Of Attempting 'Corporate Coup'

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It didn’t take long for John Malone and Liberty Media (NSDQ: LINTA) to swing back at Barry Diller and IAC’s (NSDQ: IACI) effort to get a declaratory judgment affirming the right to switch IAC to single-tier voting for the parent company and its proposed four spin-offs. Liberty filed its own suit in Delaware Chancery Court Thursday, accusing Diller, as the WSJ reports, of “trying to mount a ‘corporate coup’ with a planned restructuring that would dilute Liberty’s control over several of IAC’s major assets, which include Ticketmaster and the HSN home-shopping network.” Liberty seeks to block Diller’s plans to use his proxy for voting its shares; if he is allowed to use it, the proxy gives him enough voting power to assure the results. The restructuring was supposed to help the two resolve differences over the way Diller has run IAC and the results Liberty wants.

— The voting dispute may help explain Liberty’s Jan. 11 announcement that it had acquired another 14 million shares of IAC, increasing its holdings by about 5 percent to 30 percent; the current two-tiered vote structure gives Liberty more than 60 percent of th4 voting power. At the same time, IAC acquired 6 million shares and Liberty entered into a standstill agreement. The board meeting where IAC board member Malone disputed Diller’s right to vote the proxy took place Jan. 8.