Barry Diller is shifting his role at his IAC/Interactive Corp., making some stock and asset transactions, and most importantly, removing one of the thorns in his side -- Liberty Media's powerful holding in the company.
TV and media company Liberty Media, controlled by its chairman John Malone, will swap its 60% voting stake -- 12.8 million shares of IAC stock -- for IAC's Evite and gifts.com, plus $220 million in cash.
As part of the complicated transaction, Diller will swap some of his IAC stock holding for some class B shares in Liberty Media. All will be a tax-free swap -- a maneuver that Malone has perfected and used in the past with Liberty Media.
Prior to the transaction, Diller held 60% of the vote because he voted Liberty's shares. After it, he now owns 34% of the vote with an option to increase this to 41% in the future.
The deal effectively removes Liberty Media from IAC after a 17-year relationship that started in 1993, when Barry Diller built his interactive/Internet company and got some early financial backing from Malone.
Liberty has had some major legal tussles with IAC. In 2008, IAC/ Interactive wanted to spin off HSN, Interval International, Ticketmaster and Lending Tree into four different groups -- with Liberty in major opposition. Eventually, Diller prevailed and Liberty dropped its appeal.
Diller is also shifting his role at IAC. The chairman and CEO of IAC will now have the chairman and "senior executive" title. The new CEO will be Greg Blatt, president of Match.com, an IAC-owned company.
"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," stated Diller.
Through various spin-offs, he and Malone will continue to share interests in some ventures, such as Expedia.