UPDATE 2-IAC, Liberty reach agreement over IAC spin-offs

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By Michele Gershberg

NEW YORK, May 13 (Reuters) - Barry Diller's IAC/InterActiveCorp (IACI.O: Quote, Profile, Research, Stock Buzz) and its controlling shareholder, John Malone's Liberty Media, have reached an agreement on spinning off four of IAC's largest businesses, putting to rest a dispute that took the two top executives to court.

Liberty said it now backs a proposal by Diller that the spun-off IAC units operate under a single-tier share structure after the two sides agreed on Liberty's board representation at the new companies and other measures to protect its interests.

Diller had argued that a single-tier share structure would make the units more attractive to outside investors but his long-time friend and business partner Malone had balked at a plan that would dilute Liberty's control.

"Now it's really over and that's great for both of us," Diller, IAC's chief executive, said in a statement. Diller has said he aims to complete the spin-offs in August.

Shares in IAC rose 4 percent in extended trading.

IAC plans to spin off its cable shopping network HSN as "HSN Inc", box office service Ticketmaster, time share exchange Interval Leisure Group Inc and online mortgage business LendingTree as "Tree.com Inc," according to a filing with U.S. Securities and Exchange Commission.

The remaining IAC will focus on its Internet media and advertising businesses.