Changes aplenty were announced by IAC Thursday morning, as Barry Diller (left) removed himself from the CEO spot, remaining with the company as chairman and senior executive; a match was found in Match.com CEO Greg Blatt (right) to succeed Diller; and Liberty Media swapped its equity stake in IAC for all of the capital stock of a wholly owned IAC subsidiary that includes properties such as Evite and Gifts.com.
Blatt has been CEO of Match.com since early 2009, after spending more than five years in various senior-management posts with IAC — executive vice president, general counsel, and a member of the office of the chairman. Prior to IAC, Blatt was executive VP, business affairs and general counsel at Martha Stewart Living Omnimedia, and he also served as an associate at New York-based law firms Grubman Indursky & Schindler and Wachtell, Lipton, Rosen & Katz.
Liberty had been tied to IAC and its previous incarnations since Diller joined Silver King Communications in 1993. In the transaction announced Thursday, Liberty traded some 12.8 million shares of IAC stock — approximately 8.5 million class-B shares and 4.3 million shares of common stock, representing some 60 percent of total votes — for all capital stock in the previously mentioned subsidiary.
Diller now owns shares representing about 34 percent of the total vote classes of IAC stock, and he was granted the right to exchange up to 1.5 million additional shares of common stock he may acquire within the next nine months for an equal number of class-B shares, potentially boosting his voting control to 41 percent.
Diller said in a press release:
These last 17 years of my association with John Malone and Liberty Media have been a great and, occasionally, wild ride. We began this grand tour of interactivity a few years before the Internet became widely used, and we were able to create, acquire, and build up substantial businesses over that time. 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, and I want to state my thanks and gratitude to Dr. Malone for his support and encouragement throughout (with one brief period of mutual discontent, which we both believe was an aberration). This has been a most productive partnership, and I’m glad it will continue in other venues.
It’s been clear to me for some time that this company needs a full time aggressive and aspirational executive in the CEO role. While I’m not going anywhere, IAC — with its operating businesses growing, large cash resources, and virtually no debt — needs the kind of leadership that Greg Blatt can bring it in order to continue to grow and thrive many years into the future. Greg Blatt joined IAC in 2003 as general counsel, and in February 2009, we named him CEO of Match.com. Since that time, he has overseen a period of record-setting performance in the business, driving revenue, profit, and subscriber growth to strong double-digit levels. The IAC board looks forward to him bringing a similar stewardship to IAC.
As noted above, I have the right and the intention to purchase additional shares over the next nine months that will increase my voting share to over 40 percent. I want this to be a long-term holding for me and my family, and I want this well-capitalized and growing company to be of enduring ambition, and naming a new CEO is critical to that goal.
Liberty chairman Malone added:
We are pleased to welcome Evite and Gifts.com to Liberty Interactive’s eCommerce companies. These companies are established leaders and build on our strength in specialty commerce. Our 17-year relationship with Barry has been very beneficial in creating value for our shareholders, and this transaction represents an efficient exit for Liberty from our IAC stake. We will continue to work together through Expedia and various other public vehicles created from our association.
And Blatt said:
The one constant throughout IAC’s history has been change. While I expect that to continue, we intend for the same emphasis on consistent operating performance and disciplined deployment of capital that have defined our recent quarters to guide our decision-making and management as we grow IAC into the future. Our businesses are on solid footing, and our healthy balance sheet and strong operating cash flows put us in a great position to drive solid shareholder returns for the foreseeable future. I couldn’t be more excited about the new position and the opportunities in front of IAC.