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Last updated: December 11, 2012 7:35 pm
John Malone’s Liberty Interactive has taken voting control of TripAdvisor, the online travel group, from fellow media mogul Barry Diller in a $300m deal that marks the latest chapter in their long-running and sometimes difficult relationship.
As a result of Tuesday’s deal, Liberty Interactive will control more than a fifth of equity and more than half of total votes across TripAdvisor’s common stock. The digital business holding company, which is chaired by Mr Malone, was the largest stakeholder in TripAdvisor but did not control the majority of the votes.
It acquired 4.8m shares of extra stock in TripAdvisor from Mr Diller and the Diller-von Furstenberg Family Foundation for $62.50 a share, or about $300m, a 63 per cent premium over where the shares closed on Monday.
Mr Malone and Mr Diller have a long history in the media sector. The pair joined forces in 1993 after Mr Diller left his post as chief executive of Fox, where he created the Fox Broadcasting Company and film operations for Rupert Murdoch’s News Corp.
Mr Malone, a cable industry pioneer, backed Mr Diller as he started to assemble IAC, the media and internet group that now includes Match.com, a dating site, and Ask.com. IAC paid $212m for TripAdvisor in 2004. The following year, IAC spun off Expedia with TripAdvisor.
The relationship between the two moguls grew fractious when Mr Malone claimed that a 2007 plan to split IAC into five companies violated the terms of their proxy agreement. A judge sided with Mr Diller in the courtroom battle that ensued, but the two dealmakers remained co-investors in Expedia, the online travel group that then included TripAdvisor. In 2011, TripAdvisor spun off as an independent public company.
Founded in 2000 to help travellers around the world “plan the perfect trip” and now as well known for its often caustic consumer reviews, TripAdvisor sites rank as the world’s top travel and information destination with 64m visitors in October, according to ComScore. Annual revenues at TripAdvisor were $637.1m in 2011, with net income of $177.7m.
“Ever since we acquired TripAdvisor in 2004, it has been one of the smoothest and most trouble-free growth stories I’ve ever known,” said Mr Diller, who will stand down as chairman of the company but will continue as a director.
“My only reason for resigning as chairman and disposing of my interests is that I have more obligations than time and transferring control of TripAdvisor to Liberty is something I’m very comfortable with – Liberty has proved itself a fine steward and leader of its controlled businesses.”
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