May 26, 2005
Via Facsimile and U.S. Mail
Gregory R. Blatt
Executive Vice President, General Counsel and Secretary
IAC/InteractiveCorp
152 West 57th Street
New York, NY 10019
Re: IAC/InterActiveCorp
Form S-4 filed on April 26, 2005
File No. 333-124340
Dear Mr. Blatt:
We have reviewed the above filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects and welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
General
1. Please revise as necessary your filing on Form S-4 (file no.
333-
124303) filed April 25, 2005, to conform to the following
comments.
Cover Page
2. Please include on the cover page the amount of securities being
registered. See Item 501(b)(2) of Regulation S-K.
3. Please provide IAC/InterActiveCorp`s trading price as of the
most
recent practical date.
4. Please name the market for IAC/InterActiveCorp`s common stock
and
the trading symbol for those securities. See Item 501(b)(4) of
Regulation S-K.
Important
5. Specify the date by which security holders must request this
information. You must highlight this statement by print type or
otherwise. See Item 2 of Form S-4.
Questions and Answers about the Merger, page 1
6. Please disclose here the value of the exchange in terms of
price
per share that the exchange ratio will yield to Ask Jeeves
shareholders and what premium that represents.
The Merger, page 5
7. Please clarify what is meant by IAC expects to issue
approximately
74.8 million shares and approximately 88 million on a fully
diluted
treasury method basis.
Interests of Certain Persons in the Merger, page 6
8. Please quantify the aggregate amount of money that will be paid
to
directors and executive officers in the merger. Also, clarify
here,
if true, that there may be continuing employment opportunities for
executive officers in the new enterprise after the merger and
disclose the incentives to be paid to those executives.
Recent Developments, page 20
9. Please describe the acquisition amount and type of
consideration
used to acquire Cornerstone Brands, Inc.
Risk Factors, page 21
10. Please note that the information may be incorporated by
reference
into the proxy statement only as permitted by items in Form S-4.
It
appears that you are not eligible to incorporate by reference
under
Item 3 of Form S-4. Please revise to include the information
required by this Item, or provide us with your analysis as to why
you
believe you can incorporate by reference. Also, please provide
here
the risk factors that you refer to in Appendix E, as necessary.
IAC is controlled by Mr. Diller..., page 24
11. Please describe the voting arrangement in more detail,
including
the number and percentage of shares and voting power held by the
various parties.
Solicitation of Proxies, page 30
12. We note that proxies may be solicited by mail, telephone or
internet. Confirm that you will file all written soliciting
materials, including any scripts to be used in soliciting proxies
by
personal interview or telephone.
The Merger, page 31
13. We note your disclosure at the December 3, 2004 meeting the
board
discussed reviewing strategic alternatives. Please revise to
disclose any alternatives you considered. Also revise to expand
upon
any alternative transactions discussed with the three alternate
parties.
14. Generally, revise this section to provide more complete
description of the matters discussed and conclusions reached at
Ask
Jeeves` board meetings. Three examples, among several, of areas
which should be expanded are (i) with regard to the January 27
special meeting discussing potential strategic transactions with
the
first, second and third alternate parties-what conclusions were
reached with respect to these parties; (ii) with regard to the
February 24 special meeting where Allen & Company updated the
board
on the status of discussions with IAC and the likelihood of
receiving
a firm offer in the near future-what was the status and what was
the
likelihood; and (iii) with regard to the March 15 alternate cash
and
stock structure proposed by Mr. Kaufman-what was the proposal and
why
was it less desirable?
15. Please describe what occurred with respect to the second and
third alternate parties` interest in Ask Jeeves between March 17
when
the second alternate party contacted Allen & Company to express
its
interest in a transaction and the March 18 decision to accept
IAC`s
offer.
16. Please state clearly, if true, that the offer from IAC is the
highest offer you received. If not, disclose the higher offer and
explain in detail why it was not accepted.
Recommendation of the Ask Jeeves Board of Directors, page 36
17. It is not clear from the presentation whether the board
conducted
financial analysis or merely relied on the fairness opinions
provided
by Allen & Company and Citigroup. Please clarify.
18. Please revise to include the "additional factors" listed on
page
37 in one of two lists. One of the lists should be factors that
favor the merger and the other factors that do not favor the
merger.
19. In this regard, the factors supporting or not supporting the
merger must be explained in enough detail for investors to
understand. Conclusory statements or listing of generalized areas
of
consideration, such as "historical information concerning the
respective businesses" and "current financial market conditions"
should be expanded upon to explain how they were taken into
account
for this transaction. You will need to revise this section to
explain how each of the factors listed support or do not support
the
decision to approve the merger.
Opinions of Ask Jeeves` Financial Advisors, page 39
20. Please disclose why the board chose to hire two financial
advisors. Also, disclose the amounts known or estimated to be
received by Allen & Company and Citigroup and their affiliates for
services rendered to the Company for the previous two years. See
Item 1015(b) of Regulation M-A.
21. Please supplementally send us a copy of the board book and any
other materials prepared by Allen & Company and Citigroup to
assist
the board in evaluating the transaction. Also, provide us with a
copy of the engagement letters.
22. To the extent Allen & Company and Citigroup relied on
management
projections in their analyses, these projections should be
disclosed
in this filing.
Opinion of Allen & Company LLC, page 39
23. Please describe the relationships, discussed on page 40,
between
Allen & Company and IAC and Ask Jeeves and the potential conflicts
of
interest arising from these relationships in the risk factors
section.
24. Please revise the discussion of the various analyses used by
Allen & Company so that recipients of the proxy
statement/prospectus
can understand exactly what each analysis indicates. What are
they
used to show? We offer some additional guidance in the comments
below. As a general matter, for each analysis, please provide
sufficient explanation of each step of the analysis and its
conclusion such that an investors will understand how this
analysis
supports a conclusion that the transaction is fair.
25. Also, for each analysis, indicate what observations or
conclusions the Ask Jeeves board reached with respect to the
information that these calculations provide.
Analysis of Historical Trading Activity, page 40
26. To assist an investors understanding of the Historical Trading
Analysis, please revise to use a graphical or tabular format.
Analysis of IAC Based on its Business Segments, page 41
27. Please clarify what OIBA refers to in the first column.
Analysis of Premium Paid in Comparable Merger Transactions, page
42
28. When you speak of an implied premium that the instant exchange
ratio represents to comparable merger transactions, disclose the
price implied by this exchange ratio.
Analysis of Premium Reflected in the Exchange Ratio, page 42
29. If Allen & Company calculated the premium of the merger
consideration in comparison to additional average closing prices
besides the 30 day trailing average (for instance, 90 day and 180
day
trailing averages), please disclose these figures also.
30. Include a textual discussion explaining the point of the
graphs
on page 43. In particular, describe how the instant transaction
compares to others included in the survey. Also, explain what you
mean by the statement that the instant exchange ratio indicates a
premium "within the range of premiums paid in the comparable
merger
transactions"-it appears that this transaction falls at the lower
end
of each of the ranges provided.
Analysis of Selected Comparable Merger Transactions..., page 44
31. Describe the criteria used to select comparable companies.
32. Discuss the results of Allen & Company`s comparable
transaction
analysis. For instance, how does this transaction compare to the
low, mean and high.
Opinion of Citigroup Global Markets Inc., page 46
33. Please revise to conform with above comments regarding Allen &
Company`s opinion. Generally, provide a textual discussion that
describes what each of the analyses, including the graphical and
tabular content, means to an average investor.
IAC`s Reasons for the Merger, page 56
34. Please revise into two lists: one of the factors the board
believed favored the merger; the other the factors that did not
favor
the merger. If the board did not consider any negative factors,
so
state.
35. Please revise the section to clearly explain how each of the
factors listed support or do not support the board`s decision to
approve the merger.
Material United States Federal Income Tax Consequences, page 56
36. Please revise to delete the word "summarizes" in the opening
sentence.
Employment Agreement with Mr. Berkowitz, page 63
37. File a copy of the employment agreement with Mr. Berkowitz.
The Merger Agreement, page 66
38. Clarify that your description of the merger agreement includes
all material terms and delete the statement that your description
is
qualified by reference to the merger agreement.
Treatment of Securities in the Merger, page 66
39. We note the statement that the shares will be converted into
the
right to receive "fully paid and nonassessable shares" of IAC
common
stock. This is a legal conclusion you are not qualified to make.
Please either attribute this to counsel or delete it. Revise
throughout as necessary.
Conditions to the Merger, page 74
40. We note your disclosure that the obligations of the parties to
the merger agreement are subject to the fulfillment or waiver of
conditions as described in this section. Please indicate which of
the conditions are waivable and by which party to the agreement.
Certain Legal Proceedings, page 93
41. Supplementally provide us copies of the complaints in the
shareholder litigation discussed in this section.
42. We note your risk factor on page 23 provides that the cost of
defending the shareholder litigation could be substantial. Please
reconcile this with your statement that you believe the claims are
without merit.
43. Quantify, if practicable, the amount of damages being claimed
in
the Lane`s Gifts and Collectibles et al. litigation.
Summary Comparison Among Rights of Holders, page 102
44. From your disclosure in the document, it does not appear that
you
intend to unbundle and provide for a separate vote for some of
these
provisions. Please consider and advise, for instance in regards
to
the availability of action by written consent or supermajority
provisions. Refer to Rule 14a-4(a)(3) and Division of Corporation
Finance Manual of Publicly Available Telephone Interpretations
(Fifth
Supplement, September 2004), available on our website.
Appendix B - Allen & Company Opinion, page B-3
45. Revise the first full paragraph on page B-3 to delete the
statement that the opinion is solely for the information of the
board.
Closing Comments
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Please amend the Form S-4 in response to these comments.
Marked copies of the amendments greatly facilitate our review.
Please furnish a cover letter with your amendment that keys your
responses to our comments and provides any requested supplemental
information. Please file the response letter as correspondence on
EDGAR. Detailed cover letters greatly facilitate our review.
You may contact Mathew C. Bazley at (202) 551-3382 with any
questions or you may reach me at (202) 551-3210.
Sincerely,
Susan C. Block
cc: Via facsimile: (212) 403-2327
David C. Karp
Wachtell, Lipton, Rosen & Katz
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IAC/InterActiveCorp
May 26, 2005
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