Barry Diller is stepping down as chief executive of IAC/InterActiveCorp as the company disclosed it had bought out one of its largest shareholders, John Malone’s Liberty Media Corp.
IAC, an Internet media holding company, said that Liberty had sold its entire equity stake in IAC, worth $368 million, in exchange for $220 million in cash and the Evite and Gifts.com businesses. The online businesses will become part of Liberty’s Interactive unit.
IAC shares rose 2% as some investors bet on further transactions, such as selling its stake in Expedia to Liberty, which could boost the stock.
Liberty’s stake had included 60% of voting rights of all classes of IAC stock, which had been represented by Diller — a long-time business associate of Malone, the cable television pioneer.
The two media moguls fell out in a 2008 court case over how Diller used Malone’s voting rights in IAC.
Diller, 68, will remain as chairman and senior executive, while the company has appointed former Match.com chief executive Greg Blatt, 42, to be IAC’s new chief executive.
“It’s been clear to me for some time that this company needs a full-time, aggressive and aspirational executive in the CEO role,” said Diller, adding that he’s “not going anywhere.”
Following the transaction, Diller’s voting rights will be reduced to 34% — still the largest individual voting stake in the company.
IAC said that Diller has been granted the right to increase his voting stake to around 41% within the next nine months — which would give him more control of the business.
“Barry’s move makes sense and is not really that surprising because he’s more of a big picture type of executive,” said Clayton Moran, analyst at the Benchmark Company. “Greg Blatt is going to be more operational in his role.”
Moran said he doesn’t think the move would make a break-up of the company’s far-reaching assets any more likely. IAC owns Web businesses including search sites Ask and Citysearch and dating sites like Match.com and Chemistry. It has also announced plans for a joint venture with its Daily Beast media site with weekly print magazine Newsweek.
The transaction effectively ends a major part of a 17-year business engagement between Malone and Diller that began when Diller joined Silver King Communications.
Both men remain on the boards of several companies that were spun off from IAC in 2008, including Ticketmaster, now part of Live Nation Entertainment.
While Diller has always said he remains good friends with Malone, more evidence of the tensions surfaced after Diller suddenly stepped down in October as chairman of Live Nation and was replaced on an interim basis by Malone.
“While I’ll continue my association with Dr. Malone in Expedia, and as significant shareholders of the multiple spun-off companies, Liberty’s exit from IAC is a turning point,” Diller said in a statement.
Diller has had a colorful past as a powerful and visionary media executive and consummate dealmaker. When he ran Paramount Pictures in the 1970s, he greenlighted hit movies like “Saturday Night Fever” and “Raiders of the Lost Ark.” He later went on to run Fox for Rupert Murdoch’s News Corp, commissioning shows including “The Simpsons.”
He has often clashed both publicly and privately with other media moguls while trying to assert his entrepreneurial independence, but has usually reconciled with them.