USA Interactive To Buy The Rest Of Hotels.comUSA Interactive To Buy The Rest Of Hotels.com
The company will buy the 32% that it doesn't already own in a stock deal valued at more than $1 billion
April 10, 2003
NEW YORK (AP) -- USA Interactive said Thursday it has agreed to acquire the shares of Hotels.com that it doesn't already own in a stock deal valued at about $1.1 billion.
USA Interactive said Hotels.com shareholders will receive 2.4 USA shares for each Hotels.com share. This values Hotels.com at about $60.24 a share, based on USA's Wednesday closing price, a premium of about 13 percent to Hotels.com's closing share price of $53.30 Wednesday on the Nasdaq Stock Market. Shares of Dallas-based online hotel-room discounter Hotels.com were at $60.80 in early trading Thursday, up $7.50, or 14.1 percent, on heavy volume. Shares of USA Interactive, a New York-based company which owns the Home Shopping Network and Ticketmaster, were at $25.90 early Thursday, up 80 cents, or 3.2 percent, on the Nasdaq. USA Interactive currently owns about 68 percent of Hotels.com's outstanding stock, and controls about 97 percent of combined voting power. USA Interactive will issue about 45.2 million diluted shares to Hotels.com shareholders. The transaction won't change Hotels.com's current operating structure, as it plans to continue to operate the unit and travel-booking site Expedia separately. However, USA Interactive said it will continue to review strategy over time. An independent special committee of Hotels.com's board recommended the deal, and Hotels.com's board has approved the agreement. Hotels.com has about 1,200 employees. Current chairman and chief executive David Litman and president Bob Diener will continue in their positions. USA Interactive's chairman and chief executive is Barry Diller, a media pioneer who helped launch the Fox Television network for News Corp. The transaction is expected to close this summer. USA Interactive expects the acquisition to add slightly to 2003 adjusted earnings per share. USA Interactive originally offered to buy Hotels.com, along with Expedia and ticketing giant Ticketmaster, in June 2002. But it tabled the offer after investor opposition.
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