Diller’s IAC selling stake for $3.4 billion

Thursday, June 9, 2005 | 9:34 a.m.

Barry Diller's IAC/InterActiveCorp said Wednesday that it had agreed to sell its 5.4 percent stake in Vivendi Universal Entertainment for about $3.4 billion, ending a fractious partnership and allowing Diller to focus on his Internet businesses.

Vivendi Universal Entertainment is part of NBC Universal, which is 80 percent owned by General Electric and 20 percent owned by Vivendi Universal. NBC Universal is putting up roughly $900 million to buy Diller's stake in the entertainment unit, which includes cable networks, Universal Pictures and other assets. The rest of the money is coming from Vivendi Universal, and the deal resolves its legal dispute with Diller over tax liability issues.

On a conference call with analysts, Diller sounded relieved and pleased. The deal is "done, done and done," he said. In a telephone interview he added: "Three-way relationships are always complex, and all the parties are better off" now that the deal has been made.

IAC is now focused on its Internet businesses, including Ticketmaster, Match.com and Evite.com. Last March, the company announced that it would purchase the Internet search engine Ask Jeeves for nearly $2 billion. The company plans to spin off its Internet travel units including Expedia and Hotels.com into a separate company.

On the conference call, Diller said his company might use its resources to buy back shares rather than making further acquisitions, which surprised and pleased some investors.