IAC to Split Into Five, Stock Climbs

Internet and media conglomerate IAC/InteractiveCorp announced Monday it would spin off four of its largest divisions to allow the company to focus on its Internet and web services operations. IAC will continue to manage its portfolio of websites such as Ask.com, Match.com, and Citysearch. The four spin-offs will be HSN, the Home Shopping Network; Lending Tree mortgage referral business; timeshare company Interval International; and Ticketmaster. Each segment's management will stay in place and run each business, and CEO Barry Diller, who owns a 27% stake in the company, will retain his position at IAC as well. Explaining the restructuring, Diller said, "One of the reasons we've stayed with some of our more transactional businesses is that we needed their earnings to allow us to invest in emerging Internet businesses. Now that we have real scale in the pure Internet units, it makes nothing but sense to me to reorganize the whole." The new companies will be 100%-owned by current IAC shareholders, and the transactions should be completed in the second or third quarter of 2008. Investors, who usually respond positively to conglomerate break-ups, gave their stamp of approval to the move Monday; shares of IAC traded up 7.5% to $31.84.

Sources: Press release, Wall Street Journal, Reuters
Commentary: IAC/Interactive's Q3 Tops Targets • Will IAC/Interactive's Break-Up Generate More Value? • IAC/Interactive Upgraded by Lehman, Citi on 2008 Outlook
Stocks to watch: IACI. Competitors: GOOG, MSFT. ETFs: FDN
Earnings call transcript: IAC/InterActiveCorp Q3 2007

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.