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The fresh-faced, high-energy activist investor Gavriel Kahane is very careful to say he isn't attacking grizzled billionaire media veteran Barry Diller in his headline-making campaign against media conglomerate IAC (IAC).

Rather, his firm is just trying to create new value for shareholders.

"We're really not challenging Barry Diller," the Arkhouse managing partner told me on Yahoo Finance's Opening Bid podcast (video above; listen in below). "We are very much cooperating with the guy and are really thrilled that he's been engaged so constructively and, I would say, somewhat surprised that it's been such a cooperative and fruitful engagement thus far."

Arkhouse disclosed a "significant" stake in IAC in April.

The activist shop said IAC — which owns 40 publications such as People, a lucrative 22.5% stake in casino operator MGM (MGM), and a stake in car rental outfit Turo — is worth $72 per share if broken up. The media conglomerate's stock currently trades around $38.

"I think we see it as one of the most compelling risk-adjusted opportunities in the public market today because of the undervaluation," Kahane said. "IAC's share price is trading at the value of its liquid assets alone. We're talking about US-denominated dollars on restricted cash. And MGM also, as an aside, think MGM is tremendously undervalued."

Arkhouse did get one of its board suggestions, Tor Braham, a former tech banker, nominated to IAC's board in late April.

IAC's latest financial results underscore Arkhouse's view that the company may be worth more apart than together.

The company's sales fell 9% year over year in the first quarter, but adjusted operating profits surged 166% as it slashed costs at its various publications.

IAC ended the quarter with $1.2 billion in cash, a relatively high number when considering the company's market cap is only $3 billion. The company's stake in MGM is valued at about $2 billion.

Diller, who made his name as CEO of Twentieth Century Fox in the 1980s and has tried to buy Paramount (PARA) at least twice in the past 40 years, founded IAC in 1995. He returned to lead IAC earlier this year amid a bid to improve performance, with the management team reporting directly to him.

"So he [Diller] is actively going to do things, and he actively started doing things that we think are going to collapse the dislocation between intrinsic value and the current share price," Kahane said.