IAC shares jump after it announces plans to spin off Match Group

Match Group’s Tinder dating application is on an Apple iPhone.Gaia Squarci | Bloomberg | Getty ImagesTech holding company IAC/InterActiveCorp announced Friday it plans to spin off all of its shares of online dating company Match Group.Shares of IAC popped as much as 4.8% in early trading, while Match slid more than 1%. ANGI shares jumped more than 5%.IAC, which owns 80% of Match and 83% of ANGI, has become known for incubating businesses and spinning them off into separate companies. Over the years, it’s done the same with Expedia, HSN, Ticketmaster, Interval and LendingTree.Match has carved out a foothold in the online dating market, largely due to solid growth in its youth-oriented dating app, Tinder. It also includes other dating services like Match, Hinge and OKCupid. Match’s stock is up more than 70% so far this year and the company outperformed earnings expectations in the second quarter, with revenue climbing 18% year-over-year.Meanwhile, ANGI has underperformed expectations, with the stock down nearly 58% year-to-date. In a letter to shareholders, Levin said ANGI has struggled due to a « combination of issues around marketing and an increasingly tight supply of service professionals in certain categories. »IAC had said in August it was exploring a spin-off of Match and ANGI Homeservices, which holds digital marketplace companies like Angie’s List and Handy.Now, the company says it has submitted a proposal to members of Match’s board of directors that would result in the the full separation of Match from IAC. It plans to delay the spin-off of ANGI until it completes the separation of Match, CEO Joey Levin said in a statement. »Today IAC proposed an important first step in the separation of Match Group from IAC, » Levin said. « IAC is confident that the proposal communicated to the Match Group special committee provides strong footing for Match Group to begin its journey as a thriving, independent company. »Under the plan, IAC stockholders would take ownership of the shares of Match held by IAC. The proposal also suggests eliminating Match’s dual-class share structure in favor of adopting a single class.The Match spin-off still needs to receive the approval of IAC’s board, IAC and Match shareholders, among other stakeholders.

Source: CNBC

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