Member access

4-Traders Homepage  >  Shares  >  Nasdaq  >  Kayak Software Corp    KYAK   US4865771095

SummaryQuotesChart AnalysisNewsCompany 
News SummaryMost relevantAll news 

Priceline to buy Kayak Software for $1.8 billion

11/08/2012 | 07:48pm US/Eastern
Recommend:
0

(Reuters) - Priceline.com Inc said it will buy Kayak Software Corp in a friendly deal valued at $1.8 billion, bolstering its travel research and advertising capabilities.

Priceline is offering $40 a share for Kayak, a 29 percent premium to the company's closing price of $31.04 on Thursday. It expects to pay $500 million in cash and $1.3 billion in equity.

Kayak, which offers a website and mobile applications to help consumers compare prices for airlines, hotels and rental cars, went public in July with shares priced at $26. It operates like a search engine, letting consumers compare pricing along with other websites such as Priceline.com rivals Expedia Inc and Orbitz Worldwide Inc.

Dan Su, a Morningstar analyst, said there is concern that Priceline's rivals would likely not want to continue advertising on Kayak once the acquisition is completed.

Priceline, which is known for its name-your-own-price auction and has the largest market capitalization among online travel agencies, owes much of its success to international bookings on its popular European travel site Booking.com. But it has cited concern in recent months that weakness in Europe could slow growth.

"This certainly represents an investment for them in the paid-search, or the advertising channel, which is not an area where they've historically had a lot of exposure," said Daniel Kurnos, an analyst with Benchmark Co.

He said Orbitz stood to be affected by the deal, as Kayak is a significant driver of its traffic.

Kayak shares jumped 27 percent to more than $39 in extended trading, while Priceline.com fell about 1.7 percent to $617 from its Nasdaq close of $627.87.

Jeffery Boyd, Priceline.com President and Chief Executive, told analysts during a conference call that Kayak, which gets more than 100 million user queries each month, had built a leading position in mobile applications.

"We are excited at the prospect of Kayak building a global brand in travel planning, which we believe holds a significant financial opportunity for the group," Boyd said.

Kayak will be operated independently under the leadership of its current management, which includes company cofounders Steve Hafner and Paul English, Priceline said.

The deal is expected to close late in the first quarter of 2013.

Kayak reported third quarter results after markets closed on Thursday. It had net income of nearly $8 million, or 19 cents a diluted share, up 14 percent from $7 million, or 18 cents a share, a year earlier. Revenue rose about 29 percent to $78.6 million.

(Reporting by Karen Jacobs in Atlanta and Tej Sapru in Bangalore; Editing by Maju Samuel,; Peter Galloway and Andre Grenon)

Recommend :
0
React to this article
Latest news on KAYAK SOFTWARE CORP
05/08DJPriceline Profit Jumps Amid Stronger Bookings -- Update
02/20DJPRICELINE.COM INC : Priceline Net Up on Strong Bookings Growth
02/20DJPRICELINE.COM INC : Priceline 4th-Quarter Net Up 31% on Strong Bookings Growth
2013DJPriceline 3rd-Quarter Net Rises 40%; Darren Huston To Become CEO
2013DJPriceline Net Rises 34% But Market Dismayed by View
2013DJPriceline Net Rises 34% But Market Dismayed by View
2013DJPriceline 1st-Quarter Net Jumps 34% on International Growth
2013 KAYAK SOFTWARE CORP : Priceline.com and KAYAK announce closing date of proposed ..
2013DJPriceline Net Jumps 24% on International Growth
2013 UK antitrust review delays Priceline's deal to buy Kayak
Advertisement
Chart
Duration : Period :
Kayak Software Corp Technical Analysis Chart | KYAK | US4865771095 | 4-Traders
Dynamic quotes  
ON
| OFF