Angie's List will review unsolicited purchase offer by IAC

Angie’s List stock jumped in after-hours trading after a New York-based company made an unsolicited offer to purchase the home-service ratings company for $512 million.

The all-cash offer by IAC/InterActiveCorp was revealed Wednesday and would purchase Angie’s List stock for $8.75 a share. It proposes a merger of Indianapolis-based Angie’s List with IAC's HomeAdvisor unit through a tax-free stock-for-stock exchange.

IAC said Angie's List indicated it wasn't interested in the offer. Angie's List issued a statement Wednesday saying its board would review the proposal  "to determine the course of action that the Board believes is in the best interest of the Company and all Angie’s List shareholders."

Angie's List shares closed Wednesday at $7.92, up 1 percent. However, shares were up 12 percent in after-hours trading.

According to a letter submitted to Angie’s List’s board of directors, IAC proposes “to acquire 100 percent of the outstanding capital stock of Angie’s List … representing a compelling premium of greater than 50 percent over the unaffected price of Angie’s List common stock as of Oct. 12, 2015.”

“We were disappointed to hear that the (Angie's List) Board is not interested in further engaging with us regarding a strategic transaction involving Angie’s List,” the letter stated. “We continue to believe a transaction involving our companies has a compelling strategic rationale, and we are confident we are well-positioned to swiftly consummate a transaction that will be in the best interests of Angie's List stockholders.”

Angie’s List is on track to turn an annual profit for the first time since it was founded in 1995. It recently finished its third quarter in the black with a revenue of $87 million.

Until now, the company has been dependent on capital infusions from investors.

Last month, Angie’s List announced two measures to guarantee its customers a fair price and quality of service. The business promised that if a service isn’t satisfactory, they either will make it good or reimburse them up to $100,000. It also pledged to pay customers the difference on goods purchased within 30 days if they find a better deal.

The move is designed to help Angie’s List compete with companies like Amazon.

IAC is controlled by billionaire Barry Diller. The company's Match Group unit, which includes dating sites and apps Tinder, Match and OkCupid, recently filed for an IPO.

The Associated Press contributed to this report.

Call Star reporter Kris Turner at (317) 444-6047. Follow him on Twitter: @krisnturner.