Diller Dashes Take-Private Talk at IAC

The InterActiveCorp executive indicates he's not inclined to pursue a take-private deal or a big buyback.
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IAC/InterActiveCorp

(IACI)

shares felt the chill Tuesday after chief Barry Diller dashed cold water on speculation that a big deal is in the works.

IAC shares surged briefly last month as some investors bet Diller would soon launch an effort to take the e-travel company private. Other observers -- viewing that scenario as outlandish, given IAC's $15 billion market value and its rich price-to-earnings multiple -- proposed that Diller might instead begin a massive stock buyback.

On Tuesday, though, Diller suggested he would take a more moderate course with his New York-based Internet conglomerate, which owns travel sites Expedia.com and Hotels.com as well as mortgage broker LendingTree. Speaking at the Goldman Sachs Communicopia conference, the executive told investors and analysts that his first priority is to put his company in position to benefit from the rapid growth of Web-based commerce.

"We are a young company," Diller said in response to a question about the prospect of a big share buyback. "There is opportunity out there, and we don't really know its size."

The executive made those remarks after essentially dismissing the take-private scenario. The notion that Diller, angered by IAC's sliding public-market valuation, might move to take the company private arose most recently in mid-September. Wall Streeters said those rumors were responsible for the company's sharp run-up the afternoon of Sept. 17, when IAC shares surged 8% on no apparent news.

Addressing the perceived desire to take IAC private, Diller told the Goldman conference Tuesday that any urges he feels in that direction are "controllable urges."

"There is some compulsion, but I would say it is nowhere near overwhelming," Diller told investors.

IAC stock has since given back the gains it made in its mid-September rally. On Tuesday, with the take-private hope fading, IAC shares slipped 82 cents to $21.34. That's barely half of their 52-week high of $39 and change, set last fall. The stock has been hard hit by the growing competition that has slashed profit margins in the online travel space.

Diller's comments came on a day when IAC passed on a chance to bid on British travel site ebookers.com, and just a week after online travel rival

Cendant

(CD)

wrapped up an agreement to buy airline ticket site

Orbitz

(ORBZ)

.