IAC’s Match Group Spin-Off May Already Be “In Motion”

Seeking Alpha analyst Mark Ashton has claimed in a new article that it’s likely the wheels have already been “set in motion” for IAC to spin Match Group.

A potential spin would see the 80% of Match Group shares owned by IAC distributed to its shareholders.

Ashton argued “the mere fact that IAC is discussing it publicly” is reason to believe action is imminent, and suggested a preplanned spin would help to explain the $560 million special dividend Match gave shareholders towards the end of last year.

Analysts at the time speculated that the dividend could be used to power a major acquisition from IAC, but there has been little news to support that thesis in recent months.

The California-based firm has a history of spinning companies, most notably releasing HSN, Interval Leisure Group, Ticketmaster and Tree.com all at once in 2008. CEO Joey Levin has hinted at letting ANGI Homeservices stand alone as well as Match Group, potentially transitioning both properties at the same time.

Levin wrote in IAC’s Q2 2019 letter to shareholders: “First, we said that we are considering spinning our two large publicly traded subsidiaries, MTCH and ANGI.

“We don’t yet know where that process will lead – there’s lots of work to be done and details to consider – and we may ultimately choose to spin off both, one or neither. This isn’t just legalese to preserve IAC’s options with an expected outcome in mind – we sincerely haven’t yet decided what’s best.

“But given the heightened interest in the topic among shareholders, we thought it appropriate to keep you apprised of our thinking before any more formal evaluation process is underway, and since that will commence shortly we decided to include that information in this update.”  

The Seeking Alpha analysis noted that the move would be in line with IAC’s wider business model. The tech giant often buys companies which could benefit from scale, helps them to grow, then moves them on at a profit.

Last month, IAC invested $250 million into Turo, the “Airbnb for cars”. Turo allows users to rent cars from one another, offering a consumer-to-consumer solution to expensive vehicle hire services. 

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