Angie's List said Tuesday it won't pursue an unsolicited buyout offer from IAC/InterActiveCorp. because it undervalued the company, which wants an opportunity to develop and enact a new growth plan before considering any potential mergers.

Scott Durchslag, chief executive of Angie's List, said in prepared remarks that the board thinks Angie's List should have the chance to evaluate its so-called profitable growth plan and share it with its stockholders before making any merger decisions.

Mr. Durchslag, who was named to his post in September, has been developing the profitable growth plan. In a letter sent to IAC, he added that the company has identified $10 million in cost reductions, among other changes in progress.

He added that Angie's List had already detailed many of the same reasons for rejecting the latest offer after it also waved off an earlier offer from IAC.

Last week, IAC made public a $512 million cash offer for Angie's List, in a proposed deal that would combine the services marketplace and consumer-review site with Internet brands such as About.com and Vimeo. The offer of $8.75 a share was a 10% premium to Angie's List's closing price on Nov. 11. IAC said it also was willing to consider combining Angie's List with its HomeAdvisor business through a stock-for-stock exchange.

In a letter sent to Angie's List's board last week, IAC indicated that Angie's board had resisted its offer. IAC Chief Executive Joey Levin wrote that IAC was "disappointed" by Angie's unwillingness to engage in discussions about a transaction after an Oct. 23 meeting.

Angie's List has posted mostly losses since going public in 2011, as expansion efforts have ratcheted up costs. In October, it cut its guidance for the year even as it eked out a rare quarterly profit.

IAC owns a number of media and Internet businesses such as About.com, Vimeo and e-commerce site ShoeBuy. It also owns Match Group, the parent of dating sites Match and Tinder, but is taking that business public. The Match business accounted for a third of IAC's overall revenue in the third quarter.

With Match Group's separation from the company, IAC will be dependent on its search and applications unit, which includes sites like About.com and Ask.com, at a time when many search businesses aren't thriving.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 17, 2015 09:25 ET (14:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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