Malone v Diller

31 October 2007 By Lauren Silva

The two media moguls are fighting over how to unwind their partnership in IAC. Malone owns a $2bn stake and wants IAC s cable shopping channel, HSN. Diller may want Malone off his back. But shareholders would only be served if Malone pays a premium for HSN. Spinning it off makes this more likely.

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IAC/Interactive said it will separate into five public companies: IAC, which includes the Internet search assets, Ticketmaster, Interval International, LendingTree, and the Home Shopping Network. IAC shares rallied some 8% on the announcement.

Diller will continue as chairman and chief executive of Interactive. Mindy Grossman, Sean Moriarty, CD Davies, and Craig Nash will continue as chief executive officers of HSN. Upon completion of the transaction, IAC shareholders will own 100% of the equity in all five companies. The transaction is expected to be taxfree for the company and its shareholders and is expected to close in the second or third quarter of 2008.

On October 27, the Wall Street Journal published an article citing the growing discord between IAC/InterActiveCorp Chairman and CEO Barry Diller and Liberty Media Chairman John Malone. Liberty Media owns 24% of the economic stake of IAC/InterActiveCorp and 58% of the voting stake.

In regards to ownership of IAC/InterActiveCorp, the article quoted John Malone as saying the hook is set. It is our company. Barry ain't going to be able to spit the hook.

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