Priceline CEO Darren Huston Buying Opentable

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Priceline CEO Darren Huston Buying Opentable
Priceline Group Inc. stepped up its acquisition
spree by buying OpenTable Inc. in a deal valued
at 2.6 billion, adding restaurant bookings to an
online travel business already spanning flights,
hotels and cars. The all-cash offer of 103 per
share for the popular Internet restaurant
reservation company is 46 percent higher than
OpenTables closing price yesterday. The deal is
expected to be completed in the third quarter,
the companies said in a statement
today. Priceline is buying a company that seats
over 15 million diners per month across more
than 31,000 restaurants via online bookings. As
consumers increasingly use services like
OpenTable on mobile devices, the deal boosts
Pricelines presence on smartphones and further
connects the company to local businesses. The
OpenTable deal is the first big move for
Priceline CEO Darren Huston, who took over in
January with a challenging task continue to fuel
growth after his predecessor Jeffery Boyd, who
stayed as chairman, generated a 100-fold stock
surge in 11 years. Priceline Group Inc. stepped
up its acquisition spree by buying OpenTable Inc.
in a deal valued at 2.6 billion, adding
restaurant bookings to an online travel business
already spanning flights, hotels and cars.
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The all-cash offer of 103 per share for the
popular Internet restaurant reservation company
is 46 percent higher than OpenTables closing
price yesterday. The deal is expected to be
completed in the third quarter, the companies
said in a statement today. Also Read Darren
Huston Priceline is in Competition Priceline is
buying a company that seats over 15 million
diners per month across more than 31,000
restaurants via online bookings. As consumers
increasingly use services like OpenTable on
mobile devices, the deal boosts Pricelines
presence on smartphones and further connects the
company to local businesses. For OpenTable, the
deal is a good way to get demand in new markets,
just a natural bigger-pocketed partner to scale
the business internationally, said Praveen
Menon, analyst at Bloomberg Industries. Theyve
been largely a U.S. restaurants- type business.
This is where Priceline comes in. In addition to
expanding outside the U.S., where OpenTable
generates about 81 percent of its revenue,
Priceline will also benefit from OpenTables
mobile business, Menon said.
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OpenTables stock soared 47 percent to 103.61 at
935 a.m. in New York, slightly above the offer
price of 103 a share. The stock had dropped 11
percent this year before today. Priceline, based
in Norwalk, Connecticut, was little changed at
1,225 and had gained 5.5 percent this year
through yesterday. The takeover price is 53
percent more than OpenTables average stock price
in the prior 20 days. Thats the highest premium
since 2007 for a North American Internet deal of
more than 1 billion, according to data compiled
by Bloomberg.
News of the deal sent Internet stocks higher,
including GrubHub Inc., Groupon Inc. and
LiveDeal Inc. Revenue at OpenTable is forecast to
climb 19 percent to 226 million this year,
according to the average of analysts estimates
compiled by Bloomberg. OpenTable would be a good
asset for anyone trying to build out a local or
mobile ecosystem, Tom White, an analyst with
Macquarie Group Ltd. said last month. Priceline
CEO Huston Earned 17.9 Million in 2013, a Very
Good Year for the Company
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The company sold shares to the public in May 2009
at 20 each, and the stock soared 59 percent on
its first day of trading. Benchmark Capital, a
venture capital firm, was the biggest shareholder
in OpenTable when it went public, and its
raking in another payday with the Priceline
deal. Since the IPO, Benchmark has reduced its
holdings from 5.3 million shares, or 24 percent,
to about 1.7 million shares, or 7.4 percent of
OpenTables outstanding stock. Its now the
fourth-largest shareholder. At the 103 a share
that Priceline has agreed to pay, Benchmarks
shares would be valued at 179 million, about
56.5 million more than they were worth at
yesterdays closing price. Shareholders
representing about 7 percent of the stock
primarily OpenTable board members have already
agreed to support the deal. Among them is Bill
Gurley, an OpenTable board member and a general
partner at Benchmark. Benchmarks biggest venture
investments have included Uber Technologies Inc.,
Zillow Inc., Zipcar Inc., EBay Inc. and Yelp
Inc. The firm holds a stake of about 5.4 percent
in Twitter Inc., valued at about 1.2 billion,
according to data compiled by Bloomberg. Founded
in 1998, OpenTable will continue to be based in
San Francisco, according to the statement. The
deal, which has been approved by both companies,
includes a 91 million termination fee. OpenTable
also agreed not to solicit other takeover
offers. Priceline has used acquisitions to spur
growth and surpass Expedia Inc. in revenue. Last
years purchase of Kayak Software Corp., for
about 1.7 billion, helped Priceline capture
revenue in hotel search and the company is now
making its largest purchase ever to branch out
in restaurant bookings. The OpenTable deal is the
first big move for Priceline Chief Executive
Officer Darren Huston, who took over in January
with a challenging task continue to fuel growth
after his predecessor Jeffery Boyd, who stayed as
chairman, generated a 100-fold stock surge in 11
years.
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