Angie's List receives $512m acquisition offer from billionaire Barry Diller's IAC

US review site, Angie's List, has received an acquisition offer from media and internet behemoth, IAC/InterActiveCorp. Billionaire Barry Diller's IAC, which owns Investopedia, mobile dating app Tinder and video-sharing website Vimeo, is seeking to benefit form the deal, as it would allow merging its HomeAdvisor business with Angie's crowd-sourced reviews service.

The all-cash proposal is valued at $512m (£336.4m,€476m), which translates to $8.75 per share of Angie's List. The takeover would create a major player in the home improvement space, big enough to compete with companies like Pro.com, Porch.com and Amazon Home Services.

HomeAdvisor is an online marketplace for matching consumers with pre-screened home services professionals in three countries, including the US, France and Netherlands. According to a letter that IAC's CEO Joey Levin wrote to the board of Angie's List, the New York-based firm was willing to pay quite a premium for the firm. However, he got frustrated when the company showed no interest.

Meanwhile in October, TCS Capital Management, an employee owned hedge fund sponsor that invests in the public equity and hedging markets across the globe, said that it owned about 9% of the review site company and urged the Indianapolis-headquartered firm to merge with an industry player like HomeAdvisor.

New challenges for Angie's List

Angie's List has been facing its own set of challenges lately. The company which charges customers a membership fee to access reviews and ratings on its site is losing its market share and subscribers to others such as Yelp and TripAdvisor, that provide free access to its reviews.

It is also facing new competition from large players such as Google, Amazon.com and upstarts such as Thumbtack. The company has been inducting changes recently such as appointing a former Best Buy executive as its CEO in September and broadening its business model from being an online review site to a marketplace allowing consumers to find everything from chimney sweepers to plumbers.

Angie's List, which has appointed Bank of America Merrill Lynch as its financial advisor and Sidley Austin as its legal advisor, said that its board and management team will carefully review and evaluate the proposal in the best interest of all its shareholders.