USA Networks has asked a judge to approve the cancellation of its proposed buyout of the online cruise and vacation package agency National Leisure Group Inc.
USA Networks had agreed to buy National Leisure, a company enjoying $200 million in annual sales, for an undisclosed price on July 14 as part of a $1.5 billion plan to purchase a controlling interest in Expedia Inc. from Microsoft Corporation. USA Networks filed suit in Delaware Chancery Court on Wednesday, saying it was dropping the plan to buythe company, partly because the closely held company lost its business with retailer Costco Wholesale Corporation. According to the proposed deal, NLG`s packages and cruises would have been showcased on USA`s new travel cable channel, set to launch later this year.
The suit says that National Leisure will also suffer from “reasonably foreseeable future effects of the events of the 11th September at the World Trade Center.” USA Networks claims National Leisure`s business slump constitutes a significant change in the company`s condition, in violation of the acquisition agreement.
Barry Diller, chief executive of USA Networks, said last Tuesday that his company plans to complete the Expedia buyout even though that travel service`s bookings have declined.