IAC spotlights earnings, not lawsuit
Company, Liberty Media set to go to trial
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"During this period, we will operate the company with as much focus as possible, and I do believe we will prevail," said IAC chairman-CEO Diller during a conference call to discuss the company's latest financial results.
IAC lost $370 million in the fourth quarter, vs. a $15 million profit the year before. The swing to red was due in large part to a $476 million write-down at its LendingTree.com mortgage brokerage biz, which has been hit hard by the housing downturn.
Total revenue rose 8% to $1.86 billion.
IAC and Malone's Liberty Media are set to go to trial in Delaware Chancery Court on March 10. Diller said he expects some clarity on the case within a few weeks after that.
The two sides have been trading lawsuits and motions for the past month regarding Diller's proposed spinoff of four IAC units in a move that would create five separate companies. More to the point, they're fighting about Liberty's ultimate voting control over those assets.
Liberty actually approved the split plans but raised a racket when it appeared Diller wanted the new entities to have a different equity structure, one that would effectively slash Liberty's voting control by half of what it is now.
Malone filed a motion to oust Diller and a handful of other board members. Liberty is seeking to override a previous agreement -- made back when the two were friends -- to let Diller vote Liberty's IAC shares. Liberty claims the proposed split represents a "fundamental change" of IAC that would require Liberty's express approval.
Diller has fired back that Liberty is looking after its own interests at the expense of IAC's other shareholders. And he's called the motion to eject him a "desperate sideshow."
"While the court decides this matter, I'm going to do everything I can not to let it become a significant distraction in the running of the businesses," Diller said. He said the planning for the split was moving forward but the timing would clearly be contingent on the course of the litigation.
IAC shares have had a bumpy ride since the Liberty battle erupted. They were down 6.40% on Wednesday at $22.98.
Diller said private equity and other groups have expressed interest in some of IAC's businesses, and some could come in as partners for two or three of the new companies if and when they come to market.
IAC's umbrella also includes Ticketmaster, which is profitable; the HSN home shopping network; Ask.com; Citysearch; Evite, among others.
Diller argued the mixed financial results among IAC's various businesses make it even more reasonable to pursue the breakup.
In response to a question, Diller said it's unlikely IAC would be interested in acquiring AOL if parent Time Warner puts it on the block.
TW on Wednesday announced plans to split AOL's business in two, ahead of what many on Wall Street believe could be a first step to selling it off. Diller, who set out to build an Internet giant of his own, had eyed the AOL business in the past.
"I don't really feel the same way now," Diller said. "If AOL came down in price to something ridiculous, we probably would look at it. I just doubt we have very much interest in it."
