IAC’s Diller slams ouster effort

IAC/InterActiveCorp Chairman Barry Diller shot back Tuesday at Liberty Media Corp. Chief Executive John Malone, saying it was “preposterous” that Malone’s lawyers had filed court papers to remove him from the board in an effort to gain control of the company.

“Liberty does not control IAC,” IAC said in a statement.

New York-based IAC owns such brands as Ask.com, Match.com, Evite, Citysearch, Ticketmaster and LendingTree.

Although Liberty Media owns about 30% of IAC’s equity, it controls about 62% of the voting power because of a structure under which it holds all outstanding Class B common stock, which carries 10 votes a share. It owns about 23% of IAC’s regular common stock, which carries one vote a share.

Under an agreement, Diller has controlled Liberty’s votes for years. At question in the suit filed Monday is whether Liberty can reclaim those voting rights; it asserts that Diller gave up those rights when he went against Liberty’s will in pushing forward with a plan to split up IAC.

“We think the lawsuit will delay IACI’s restructuring plans from early [in the third quarter] to at least to the end of 2008,” Sanford C. Bernstein & Co. analyst Jeffrey Lindsay told investors Tuesday.

IAC shares rose 48 cents, or 1.9%, to $25.65.