Online
travel agency Expedia said it would buy rival Orbitz for about $1.38
billion in cash as it looks to increase its customer base in a highly
competitive travel industry.
Orbitz’s
shares shot up 22.5 percent to $11.79 in premarket trading, slightly
shy of Expedia’s offer of $12 per share. Expedia’s shares rose nearly 10
percent to $85.99.
“We
are attracted to the Orbitz Worldwide business because of its strong
brands and impressive team,” Dara Khosrowshahi, chief executive of
Expedia, said in a statement.
Orbitz,
the operator of the CheapTickets website, was exploring a sale and had
engaged financial advisers to reach out to potential buyers, Bloomberg
had reported last month.
Expedia,
which recently slipped behind Priceline to become the world’s second
largest travel services company by bookings, has expanded rapidly by
buying Travelocity last month and the Wotif Group in November 2014.
The deal has an enterprise value of $1.6 billion, the companies said in a joint statement.
The equity value of the deal is based on about 115 million Orbitz shares outstanding as of Dec. 31.
Posted by : Gizmeon
No comments:
Post a Comment