Or you could say JPMorgan will FIRE half of Bear Stearns staff. It's all how you look at it, really. Plus! The GM building may have a new owner, 'People' people get a hairy new deadline, and a lawyer's advice for tax dodgers in our daily roundup of industry news.
Carl Icahn may be getting ready to sink his teeth into Yahoo, 'Newsday' girds intself for new ownership, and 'Vogue' editor Hamish Bowles within prime stalking distance of Daily Intel editor Chris Rovzar in our daily roundup of finance, media, law, and real-estate news.
• Joseph Lewis, the British billionaire who built up his stake in Bear Stearns last summer, lost about $1.6 billion this past weekend, approximately half of his entire fortune. Bear's biggest investor, Dallas-based money manager James Barrow, whose firm had a 9.95 percent stake, also lost big — at least $750 million. Activist shareholder Bruce Sherman and departed CEO James Cayne each lost big on their 5 percent stakes, although Cayne might not care so much: He just closed on a $28.24 million Plaza pad and spent late last week playing bridge in a tournament in Detroit. [Bloomberg]
• Meanwhile, Bear's "fire sale" is spreading like wildfire down the street, singing Lehman Brothers, among other top banks. [DealBook/NYT]
• And Barry Diller's IAC is "sputtering." [NYT]
Last October, when Barry Diller picked up The Wall Street Journal and saw his business partner in IAC, Liberty Media founder John Malone, sniping that although once there was a Barry Diller premium on Wall Street, "Today you could argue there is a Barry discount," among other things, he felt not unlike Minnie Driver when she found out Matt Damon was breaking up with her by hearing it on Oprah. "How could they be that mean?" Diller whined in Delaware chancery court yesterday. "How could they be that hostile?" For two weeks, he sat around, "waiting for the phone to ring," he said. "I expected John Malone to call me and apologize." But the call never came. Diller's testimony is the last in the trial that will determine the fate of IAC, and his statements yesterday underscore the fact that while Diller, Malone, and Malone's deputy boy toy Gregory Maffei may act as though their fight is over what's best for shareholders, this battle is personal, and that whatever the outcome of the trial, the ending to the IAC story was written long ago. Specifically, in those dark, cold months between the fall and Christmas. It was December 21, when Malone finally approached Diller, who told him: "You lost me."
Scenes From a Marriage [Portfolio]
• How did the New York Times get the Spitzer scoop anyway? [NYO]
• "CNN Admits: We Shouldn't Have Used Alleged Stripper Biter As Spitzer Commentator." [AP via HuffPo]
• Bids for an interviews with "Kristen," the prostitute who slept with "Client 9," are reportedly up to $100,000. [Guest of a Guest]
Anna Wintour looked quite the chic cheerleader last night. Poised next to Rupert Murdoch, she watched her favorite Fashion Week buddy, Roger Federer, battle it out against tennis hero Pete Sampras at the sold-out Madison Square Garden. In fact, an assortment of celebrities —Tiger Woods, Chloë Sevigny, Regis Philbin, and a fresh-from-court Barry Diller —showed up to watch the dashing Federer and the legendary Sampras fight it out on the court. But while the two tennis greats were fierce during the game, they were friendly before, during a Q&A session in front of a VIP crowd in the NetJets private lounge, where they compared Wimbledon wins, private-plane experiences, “favorite strokes” (they both like their serves), and training schedules. Federer says he plays for four to five hours a day, in addition to body conditioning and routine massages. “Yeah, it’s pretty much the same for me,” the now-retired Sampras agreed, then paused and said he was kidding. “To be honest, I get bored after about an hour." When asked if he had any advice for the reigning champ Federer, Sampras smiled: “Sure. Quit now.” Then Federer beat him. —Katie Goldsmith
Well, it's time. With heads bowed and hearts, perhaps, heavy, longtime partners Barry Diller and John Malone will appear in Delaware chancery court today, where a judge will help the two moguls, who have been financially intertwined for the past twenty years, make up or break up. The court visit comes after a lengthy and sometimes ugly public battle, during which Malone maligned Diller's lavish lifestyle and Diller called Malone "crazy," among other things. For two well-regarded, exceedingly clever businessmen, it has been something of an undignified spectacle. Why, many are asking, couldn't they just work it out?
Many of you know celebrity astrologer Susan Miller as the uncannily accurate predictor of your fate. You're in good company: She's got A-listers like Kirsten Dunst and Orlando Bloom paying her to do their charts and gets fifteen million page views a month on her Website, Astrologyzone. She's asked to analyze the stars for actors, musicians, and starlets all the time — but when we got the chance to talk with her, we wanted to know what the future holds for a group of guys even nearer and dearer to our heart. Guys like embattled IAC CEO Barry Diller, Blackstone CEO Steven Schwarzman, ousted Citigroup CEO Chuck Prince, and Merrill Lynch newbie John Thain. After all, these people have much more power to wreak havoc in our lives if the stars choose not to shine on them. After the jump, read Miller's uncannily prescient analysis (it would be more precise if she knew the times of day they were born) and learn what warnings these four financial powerhouses need to heed if they want to come out of 2008 on top.
Barry Diller can only hope justice will be swift next week, when he and his comrade turned nemesis John Malone, of Liberty Media, meet in Delaware court to face off over Diller's future with his Liberty-backed company, InterActive Corp. Or surrender, as the case may be. "It's very odd that two people who don't want to give up control of anything are giving control to a judge in Delaware," he said at a Variety event at the Four Seasons yesterday. Speaking about the lawsuit Malone filed against him after he said he wanted to break up the company, Diller expressed, for the second time in as many months, traces of doubt and humility, emotions that had previously eluded him. "The wonderful thing about Delaware is they do it quickly," Diller added. "They make a decision quickly." Aw. Kind of like when your mom pulls a Band-Aid off an ouchy, right, Barry?
Diller Expresses Doubt at Event [Variety]
Related: Heavyweights Barry Diller and John Malone Get in the Ring
It's a Barry Diller pile on! After his IAC/InterActiveCorp posted large losses and disappointing fourth-quarter results yesterday (largely due to the effects the subprime market had on its mortgage site, LendingTree), the embattled CEO, currently locked in a legal battle with his backer, Liberty Media CEO John Malone, who has been trying to oust him, is now taking a beating in the press. “It just seems like Barry Diller doesn’t have enough fingers to plug the holes in this bucket,” RBC Capital Markets analyst Jordan Rohan told the Times. “It seems like a company that’s always firing on only one or two cylinders.”
“There's probably no momentum to maintain Barry Diller in his current role,” Sanford C. Bernstein analyst Jeffrey Lindsay told Bloomberg. And Forbes suggests that John Malone just go ahead and “close the coffin” on Diller's reign at the company.
•Lela Rose thinks she's still in the running to design Jenna Bush's wedding dress, despite a first family visit to Oscar de la Renta last week. [NYDN]
•Anne Hathaway totally lied when she said she wouldn't be attending any fashion shows this week. She and Raffaello Follieri were at Miss Sixty. [The Cut]
• Sheryl Crow enters the fashion arena, with an affordable denim line by the same people who make Victoria Beckham's dVb line. [WWD]
Liberty Media's effort to seize control of InterActiveCorp, the $7 billion e-commerce company built by Barry Diller with Liberty's backing, is not being driven by Malone alone. The Wall Street Journal this morning tells us a little bit about the third man involved in the mission of ousting Diller, one who may have been hired for the purpose. He even has a hit-man–like name: Gregory Maffei. Gregory Maffei. Scary! Where was Maffei before he was hired at Liberty? Zapping people in a Harry Potter novel? Building homemade bombs in Chechnya? No. Actually, he worked for Bill Gates and Larry Ellison. Then he became the chairman of IAC offshoot Expedia, where he first tangled with Diller. Relations, the Journal tells us, soon became "cold." The point is, like any good assassin, Maffei has gotten to know his mark. (When Malone made him CEO, it was due, according to the Journal, to his "understanding of Barry Diller's very delicate psyche.") Now, it appears he's using his knowledge to systematically destroy Diller: It was his plan to attempt to legally dismantle the agreement the company made with Diller back in the nineties that guaranteed him voting rights, an agreement he had believed was ironclad. "These people are insane!" Diller sputtered when he found out yesterday. Indeed. Insanely brilliant. This whole thing is going to get a lot more interesting.
A Not-So-Loving Triangle [WSJ]
It's a rumble! Yesterday Liberty Corp John Malone took steps to seize control of IAC/InterActiveCorp from IAC chairman Barry Diller, in a move that marked an "escalation of hostilities" between Diller and his longtime backer Malone. That's how The Wall Street Journal put it, but to us it sounds more like nuclear war. Malone signaled he was plotting a coup in IAC — a $7 billion conglomerate that includes the Home Shopping Network and Ticketmaster — when he upped his stake earlier this month, and last week, the two filed suit against each other in Delaware Chancery Court. Now, Malone is attempting to get around a proxy agreement that guarantees Diller a voting stake in IAC, and eject him from the company for good, citing Diller's "misconduct" and criticizing the giant paychecks he writes himself. "I am beginning to think these people are insane," Diller said in a statement. "Everything they cite is hogwash." Business Week suggests that Malone's Machiavellian maneuvering has less to do with his concern for shareholders and more to do with the fact that he is trying to get a cut-rate deal for the Home Shopping Network, so that he may merge it with Liberty's QVC, creating one monster television and online outlet for porcelain vases and zirconium jewelry. But is their highly public battle only going to scorch the earth?
Malone Moves to Oust Diller [Business Week]
Liberty Media Moves to Take IAC From Diller [WSJ]
Earlier: Barry Diller and John Malone Kick Each Other Under the Table; Barry Diller and John Malone Get in the Ring
It’s like Laurel suing Hardy. Or Sergey suing Larry. Word broke yesterday that John Malone’s Liberty Media was suing Barry Diller’s IAC/InteractiveCorp, with the aim of preventing a restructuring that would dilute its control over IAC’s component parts, which include Ticketmaster, the Home Shopping Network, and a passel of Internet properties like Match.com and Ask.com. One of the most lucrative and lengthy partnerships in media has apparently run its course.
That’s the simple explanation. Here’s the confusing one: Liberty Media shouldn't really have to sue to stop IAC's move, because it actually owns a majority voting stake in IAC — 61.7 percent, to be exact. Being the trusting guy he is, however, Malone long ago agreed to assign Diller the right to vote his shares. Being the crafty guy he is, Diller is now attempting to use those very votes to strip Malone of his majority control. It’s really quite awesome when you think of it: Diller wants to use Malone’s votes to take those same votes away. Got it?