Suit filed against National Leisure Group
USA Networks has sued to stop its pending merger deal with travel services firm National Leisure Group, in part over worries that the Sept. 11 attacks could have a “hugely negative impact” on the company’s business.
Suit, filed in the Delaware Court of Chancery on Wednesday, also named several investment entities with stakes in National Leisure, including Japanese high-tech investment firm Softbank.
Among the other factors at play in USA’s demand to opt out of the deal, which was to have closed on Sept. 28, were the termination of National Leisure’s business with retailer Costco, as well as National Leisure’s lackluster financial performance since the merger deal was struck on July 14.
In its complaint, USA argued that its concerns constituted a “material adverse effect” on National Leisure, which, the cabler claimed, “gives rise to an independent right to terminate on the part of the plaintiffs.”
Despite any concerns over the health of the travel industry, however, USA topper Barry Diller reiterated his commitment at an investment conference Tuesday to a separate deal to pick up a majority stake in Microsoft travel site Expedia.com.