IAC Statement on Liberty Lawsuit

Jan 29, 2008, 00:00 ET from IAC

    NEW YORK, Jan. 29 /PRNewswire-FirstCall/ -- IAC (Nasdaq:   IACI) today
 issued a statement regarding a lawsuit by Liberty Media.
     Last night, Liberty Media took the extraordinary action of attempting
 to claim control of the voting power of IAC and replacing a majority of its
 directors. The action is preposterous. Liberty does not control IAC. Barry
 Diller continues to be the Chairman and CEO of IAC, the Board of Directors
 of IAC elected at last summer's stockholders meeting continues to manage
 the affairs of the Company, and IAC management continues to work in the
 best interest of its stockholders toward consummation of the previously
 announced transactions in which it will separate into 5 public companies.
     The chain of events that led to this point is quite simple. Mr. Diller
 recommended to IAC's Board of Directors earlier this month that IAC's
 previously announced spin-off transactions be structured so that all
 shareholders receive the same class of stock in the resulting companies,
 while IAC continues with its dual class stock structure. This
 recommendation was made because a dual class voting structure, like that of
 IAC, was far less compatible with the fundamental business rationale
 driving the Board's spin-off, which was unanimously approved last November
 by IAC's Board of Directors, including Liberty's two Board designees. Mr.
 Diller was very clear at its January Board meeting that the Board was not
 being asked to act upon this recommendation at the meeting, but would be
 given further time to deliberate on the issue, including additional
 discussions with management and advisors, prior to a Board vote. The Board
 in fact took no formal action relating to the issue. At the meeting,
 Liberty objected to the single class structure, alleging that this would
 violate various contractual and legal obligations. As a result, IAC and Mr.
 Diller filed an action in Delaware court to seek affirmation of its view of
 their rights. It did this so that a court could promptly resolve the
 dispute before either IAC, its shareholders, or Liberty could be injured by
 any one taking definitive actions based on conflicting interpretations of
 the governing documents.
     Despite this well intentioned effort at peaceful resolution, Liberty
 has now gone off the deep end, not only alleging that Mr. Diller has
 somehow materially breached his proxy by which he has voted Liberty's IAC
 shares for over 12 years, but also purporting to unilaterally throw out the
 incumbent directors and installing its own slate.
     Regardless of whether IAC and Mr. Diller are correct about their rights
 to effect a single-class voting structure in the spin-offs, which they are
 confident they are, the contention that Liberty is now in control of the
 Company is inexplicable. Nothing has happened yet. No Board has decided
 anything. No shareholders have voted (or been asked to vote) on anything.
 No agreements have been signed. The requisite filings have not been made
 with the SEC. No transactions have been consummated. Even after reading the
 various complaints repeatedly, Liberty's theory that it now controls IAC is
     This action is a desperate sideshow designed to exert pressure on the
 Board and management of IAC as they attempt to responsibly act in the best
 interest of their stockholders. All it demonstrates is that Liberty will
 stop at nothing to advance their own interests at the expense of the other
 stockholders. Needless to say, IAC will not be daunted. IAC and Mr. Diller
 are highly confident that they will prevail on the merits of the ongoing
 litigation, and regret the fact that IAC's employees and stockholders have
 been exposed to such reckless and frivolous actions.
     About IAC
     IAC operates leading and diversified businesses in sectors being
 transformed by the internet, online and offline... our mission is to
 harness the power of interactivity to make daily life easier and more
 productive for people all over the world. To view a full list of the
 companies of IAC please visit our website at http://iac.com.
Contact Information: IAC Communications Office IAC Investor Relations Stacy Simpson/ Leslie Cafferty Eoin Ryan (212) 314-7470/ 7326 (212) 314-7400