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IAC Mulls Giving Up Control of Match to Streamline Company

Olivia Carville and Jeran Wittenstein

(Bloomberg) -- IAC/InterActive Corp. is considering giving up control of its top two money-makers: Match Group Inc. and ANGI Homeservices Inc. in an effort to streamline its sprawling operations. The stock jumped on the news.

In a letter to shareholders Wednesday, IAC Chief Executive Officer Joey Levin said the company is “considering spinning our two large publicly traded subsidiaries,” adding that IAC may ultimately decide to do nothing. “We sincerely haven’t decided yet what’s best.”

At the end of March, IAC owned 98% of the voting interest in ANGI and 97.5% in Match, according to company filings. The two companies have dominated IAC’s portfolio for years. IAC also reported second-quarter earnings Wednesday, with Match accounting for 41% of the total $1.19 billion in revenue, and ANGI accounting for 29%. IAC reported earnings per share of $1.19, beating the average analyst estimate for 96 cents.

IAC is a media and internet company that owns more than 150 brands and products, including Match, ANGI, the video-sharing platform Vimeo and news website The Daily Beast. The company is owned by billionaire media mogul Barry Diller, who has been involved in the recent discussions about potentially letting go of its two star performers, Levin said in an interview.

“We have done this a lot of times throughout history," Levin said. “We are not empire builders." When IAC’s businesses are big enough and strong enough to stand on their own, “that’s when we consider a spin off," he said.

Match’s shares have gained more than seven-fold since its initial public offering in 2015. On Wednesday, its shares rallied the most ever after reporting surprisingly positive second-quarter earnings, with huge subscriber growth in the online dating app Tinder. The strength of Match’s financial results caused IAC shares to gain 11% Wednesday. They spiked 6.5% in extended trading after IAC’s earnings results and news that the company is considering spinning off Match and ANGI.

IAC bought consumer-recommendation website Angie’s List in 2017 and combined it with its HomeAdvisor online-review business to create a new publicly traded company, ANGI Homeservices.

IAC previously spun off the online travel giant Expedia into its own entity in 2004. Four years later, it shed HSN TV, Ticketmaster, Interval International and LendingTree.

“We have been restructuring this company for 20 years," Diller said in an interview on Bloomberg TV in 2016. The reason “is not for external purposes or for how you show it to the world, it’s for how you function internally and how you manage," he said. “Continuing to streamline makes sense."

To contact the reporters on this story: Olivia Carville in New York at ocarville1@bloomberg.net;Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Andrew Pollack

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