Livedoor President Takafumi Horie is all smiles at a news conference on Friday night in Tokyo.

Nippon Broadcasting files a protest, as Fuji TV's quest for control is dealt a setback.

A court Friday ordered an injunction against Nippon Broadcasting System Inc.'s plan to become a subsidiary of Fuji Television Network Inc., giving Livedoor Co. an early victory in an expected drawn-out legal battle for the radio broadcaster.

The Tokyo District Court backed Livedoor's lawsuit filed 15 days ago against Nippon Broadcasting's planned subscription warrant that would have given Fuji TV the right to buy 47.2 million new shares in the radio broadcaster.

The subscription warrant would have made Fuji TV the biggest shareholder in Nippon Broadcasting and quashed Livedoor's surprise bid for control of the radio broadcaster.

Instead, Fuji TV was dealt the setback.

``Issuing (the warrant) is mainly for the purpose of maintaining control of current management and is extremely unfair,'' Presiding Judge Yasushi Kanokogi said.

Nippon Broadcasting immediately filed a protest with the Tokyo District Court. Another judge will hand down a decision on Friday's ruling.

The appeals process could eventually reach the Supreme Court.

But Livedoor President Takafumi Horie savored the moment on Friday.

``We are very happy that our arguments were accepted,'' he said at a news conference in Tokyo. ``We intend to continue to call on (Fuji TV) to enter into a business partnership as we have intended from before.''

Livedoor, an Internet services provider, has obtained voting rights of more than 45 percent in Nippon Broadcasting and is seeking to gain a majority share. Through a publicly announced takeover bid, Fuji TV hiked its stake in the radio broadcaster to about 37 percent.

If the subscription warrant had been allowed to go through, Fuji TV would have easily acquired the approximately 8.88 million shares needed to give it majority ownership.

The main points of contention in the suit were whether the warrant was made on conditions favorable to a certain third party, in this case Fuji TV, and whether the issuance of the warrant was fair.

Legal experts expected the decision to be based on whether the warrant was meant to maintain the control of present management or was intended to maintain the corporate value of Nippon Broadcasting.

The Tokyo District Court said there were ``no irrational points in the manner in which the price of the warrant was calculated'' and that the move could not be seen as favoring a particular party.

Nippon Broadcasting defended the move in court by saying its corporate value would fall drastically if it left the Fujisankei Communications Group.

However, the Tokyo District Court doubted the corporate value would be ``clearly hurt'' if Livedoor gained control of Nippon Broadcasting.

Horie said Livedoor will continue to seek a forum to discuss matters with Fuji TV about creating a working relationship.

Fuji TV executives have rejected any overtures from Livedoor for discussions over Nippon Broadcasting.

The acrimony started after Livedoor's off-hours transaction on Feb. 8 through which it gained a 35-percent share in Nippon Broadcasting.

The Tokyo District Court on Friday also said that Livedoor's actions on Feb. 8 were legal.

While the court's ruling Friday temporarily thwarts Fuji TV's plan to make Nippon Broadcasting its subsidiary, Livedoor still does not have a clear road to complete control of the radio broadcaster.

Fuji TV owns more than one-third of Nippon Broadcasting's shares, giving it veto power over important matters placed before a shareholders' meeting.

Moreover, while Nippon Broadcasting's 22.5-percent share in Fuji TV would give Livedoor an indirect hand over the television network, Commercial Code provisions dictate a company in a cross-shareholding relationship loses voting rights in the other company once the ownership of the other exceeds 25 percent.(IHT/Asahi: March 12,2005)