Exhibit 99.1
Filed by IAC/InterActiveCorp
Pursuant to Rule 425
Under the Securities Act of 1933
Deemed filed and Rule 14a-12
Under the Securities Exchange Act of 1934
Commission File No. 0-20570
[IAC/INTERACTIVECORP LOGO]
IAC ANNOUNCES PLAN TO SEPARATE INTO TWO COMPANIES
TRAVEL BUSINESSES TO BECOME PUBLIC COMPANY CALLED 'EXPEDIA'
NEW YORK, NY - DECEMBER 21, 2004 - IAC/InterActiveCorp announced today that its
Board of Directors has approved a plan to separate IAC into two publicly traded
companies:
o Expedia, which will include the domestic and international operations
associated with Expedia.com, Hotels.com, Hotwire, TravelNow.com,
Activity World, HotelDiscount.com, Condosaver.com, AllLuxuryHotels.com,
Anyway.com, eLong, TV Travel Shop, Expedia Corporate Travel, Classic
Custom Vacations, and TripAdvisor; and
o IAC, which will include the domestic and international operations
associated with IAC's Ticketing business, including Ticketmaster,
ReserveAmerica, TicketWeb and MuseumTix.com; Electronic Retailing
business, including HSN, HSN.com, HSE 24, America's Store,
Improvements, and 9Live; Financial Services and Real Estate, including
LendingTree, RealEstate.com, GetSmart, iNest, and Domania; Local and
Media Services, including Citysearch, ServiceMagic, Entertainment
Publications, and Evite; Personals, including Match.com and uDate;
Teleservices, including Precision Response Corporation, Access Direct,
and Hancock Information Group; and Interval International.
IAC will retain the Company's VUE securities, outstanding indebtedness and
preferred stock obligations, as well as substantially the Company's cash.
Expedia will be appropriately capitalized.
Barry Diller will remain as Chairman and CEO of IAC. Mr. Diller will also serve
as Chairman of Expedia and its senior executive; and Dara Khosrowshahi, who the
company previously announced would become President and CEO of IAC Travel, will
serve as CEO of Expedia. Victor Kaufman will remain as Vice Chairman of IAC and
will also serve as Vice Chairman of Expedia.
SEE IMPORTANT NOTES AT END OF RELEASE
Related to this announcement, Mr. Diller released a Letter to Shareholders
(attached) outlining the background and rationale for this development.
The transaction is anticipated to take the form of a reclassification of IAC
shares, with the holders of IAC stock receiving a proportionate amount of
Expedia stock in a tax-free transaction.
It is contemplated that outstanding IAC stock options and restricted stock units
held by IAC employees will be converted into options or restricted stock units
of the company (either IAC or Expedia) with which each employee remains
following the transaction. Appropriate adjustments will be made to all awards so
that pre-transaction value will be maintained immediately following the
transaction. Mr. Diller's IAC stock options will be converted to options in both
IAC and Expedia, with exercise prices adjusted on a proportional basis based on
the relative trading value of each company following the close of the
transaction. Mr. Kaufman's outstanding equity will be treated the same as Mr.
Diller's.
The transaction is subject to a number of conditions including final approval by
IAC's Board of Directors of transaction specifics, receipt of a tax opinion of
counsel and the filing and effectiveness of registration statements with the
Securities and Exchange Commission. In addition, it is expected that IAC
stockholder approval will be required. The proposed spin-off is expected to be
completed in the second quarter of 2005.
IAC will audiocast a conference call with investors and analysts discussing the
transaction on Tuesday, December 21, 2004, at 11:00 a.m. Eastern Time (ET). The
live audiocast is open to the public at HTTP://WWW.IAC.COM/INVESTORS.HTML.
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ABOUT IAC/INTERACTIVECORP
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 Corporate Communications
Deborah Roth / Andrea Riggs
(212) 314-7254 / 7280
IAC Investor Relations
Roger Clark / Lauren Porat
(212) 314-7400
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SUPPLEMENTAL FINANCIAL INFORMATION AND RECONCILIATIONS TO NON-GAAP MEASURES(a)
($ in millions, rounding differences may exist)
BUSINESSES COMPRISING EXPEDIA (POST-TRANSACTION)(b)
12 Months
Ended
9/30/04
---------
Revenue (on a comparable net basis) $ 1,825
Operating Income $ 404
Plus: amortization and merger costs 145
---------
Operating Income Before Amortization $ 549
---------
- ------------------------------------------------------------------
BUSINESSES COMPRISING IAC (POST-TRANSACTION)(c)
12 Months
Ended
9/30/04
---------
Revenue $ 4,239
Operating Income $ 326
Plus: amortization and merger costs 203
---------
Operating Income Before Amortization $ 529
---------
- -----------------------------------------------------------------
CORPORATE EXPENSE
12 Months
Ended
9/30/04
---------
Operating income/(loss) $ (286)
Plus: amortization and merger costs $ 201
---------
Operating Income/(Loss) Before Amortization $ (86)
---------
- -----------------------------------------------------------------
(a) Data is for informational purposes only, and does not reflect all of
Expedia's costs of doing business, including certain pro forma and other
adjustments for items such as non-cash compensation related to Expedia
employees that is currently recorded at IAC Corporate. Allocations and pro
forma adjustments will be finalized and reported in future company filings.
In addition, certain revenue amounts which were historically eliminated in
consolidation will no longer be eliminated, such as revenues for services
provided by PRC to Expedia. For this reason, the combined revenue presented
for Expedia and IAC is slightly greater than the consolidated revenue
presented in historical financial statements.
(b) After the transaction, Expedia will include the domestic and international
operations associated with Expedia.com, Hotels.com, Hotwire, TravelNow.com,
Activity World, HotelDiscount.com, Condosaver.com, AllLuxuryHotels.com,
Anyway.com, eLong, TV Travel Shop, Expedia Corporate Travel, Classic Custom
Vacations, and TripAdvisor.
(c) After the transaction, IAC will include the domestic and international
operations associated with IAC's Ticketing business, including Ticketmaster,
ReserveAmerica, TicketWeb and MuseumTix.com; Electronic Retailing business,
including HSN, HSN.com, HSE 24, America's Store, Improvements, and 9Live;
Financial Services and Real Estate, including LendingTree, RealEstate.com,
GetSmart, iNest, and Domania; Local and Media Services, including
Citysearch, ServiceMagic, Entertainment Publications, and Evite; Personals,
including Match.com and uDate; Teleservices, including Precision Response
Corporation, Access Direct, and Hancock Information Group; and Interval
International.
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include statements relating to IAC's anticipated financial
performance, business prospects, and similar matters, and/or statements preceded
by, followed by or that include the words "expects," "anticipates,"
"contemplates," "intends," "plans," or similar expressions. These
forward-looking statements are based on management's current expectations and
assumptions, which are inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. Actual results may differ
materially from those suggested by the forward-looking statements due to a
variety of factors, including the risks inherent in separating Expedia from IAC;
costs related to the proposed transaction; changes in business, political, and
economic conditions due to the threat of future terrorist activity or otherwise;
future regulatory and legislative actions and conditions affecting our operating
areas; actions and initiatives by current and potential competitors; the ability
to expand into and successfully operate in international markets, and other
risks described in IAC's filings with the Securities and Exchange Commission
(the "SEC). Other unknown or unpredictable factors also could have material
adverse effects on IAC's and Expedia's future results, performance or
achievements. In light of these risks, uncertainties, assumptions and factors,
the forward-looking events discussed in this press release may not occur. You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date stated, or if no date is stated, as of the date
of this press release.
IAC is not under any obligation and does not intend to make publicly available
any update or other revisions to any of the forward-looking statements contained
in this press release to reflect circumstances existing after the date of this
press release or to reflect the occurrence of future events even if experience
or future events make it clear that any expected results expressed or implied by
those forward-looking statements will not be realized.
ADDITIONAL INFORMATION
In connection with the proposed spin-off it is currently expected that IAC will
file a proxy statement/prospectus with the SEC. Stockholders of IAC are urged to
read the proxy statement/prospectus, when it becomes available, because it will
contain important information about IAC, the proposed spin-off transaction and
related matters. Investors and security holders can obtain free copies of the
proxy statement/prospectus when it becomes available by contacting Investor
Relations, IAC/InterActiveCorp, Carnegie Hall Tower, 152 W. 57th Street, 42nd
Floor, New York, NY 10019 (Telephone: (212) 314-7400). Investors and security
holders can also obtain free copies of the proxy statement/prospectus and other
documents filed by IAC and Expedia with the SEC in connection with the proposed
spin-off transaction at the SEC's web site at WWW.SEC.GOV.
In addition to the proxy statement, IAC files annual, quarterly and current
reports, proxy statements and other information with the SEC, each of which
should be available at the SEC's web site at WWW.SEC.GOV. You may also read and
copy any reports, statements
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and other information filed by IAC at the SEC public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information.
IAC and its directors, executive officers and certain members of management and
other employees may be deemed to be participants in the solicitation of proxies
of IAC's stockholders to approve the proposed spin-off transaction. Such
individuals may have interests in the transaction as described herein, including
as a result of current holdings of options or shares of IAC's stock and future
holdings of options or shares of Expedia's stock, which will be impacted in the
transaction. Information regarding IAC and the equity interests of its directors
and officers who may be deemed to be participants in the solicitation of proxies
is contained in IAC's proxy statement, filed with the SEC on April 29, 2004.
As filed with the SEC December 21, 2004.
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