Travel website owner buy restaurant reservation website operator

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Travel website owner buy restaurant reservation
website operator
Travel website owner Priceline- CEO Darren Huston
will buy restaurant reservation website operator
OpenTable for 2.6 billion, aiming to broaden its
offerings in an increasingly competitive online
travel industry. Pricelines offer of 103 per
share for the owner of OpenTable.com represents
a premium of 46 percent to OpenTable. OpenTables
shares inched past the offer price to trade at
104.19 on the Nasdaq, suggesting that some
investors expect a higher bid. Pricelines shares
were down 1.6 percent at 1,205.50.
With online travel companies having little room
to expand, many are looking outside the industry
to boost revenue. Travel review website
TripAdvisor bought online restaurant booking
platform Lafourchette last month to enter the
restaurant-booking industry. Darren Huston Talks
Direct Booking, HomeAway and Unicorns OpenTables
shares were trading at about 33.5 times 12-month
estimated forward earnings, far below the 498.7
times of competitor Yelp, according to Thomson
Reuters StarMine.
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I think (the deal) creates urgency for larger
players to acquire the leading local platforms,
Telsey Advisory Group analyst James Cakmak told
Reuters.
The deal is expected to close in the third
quarter. OpenTable, which is facing increasing
competition from Yelp and others, posted its
first quarterly loss in five years for the
period ended March 31 as it spent more on
marketing to stem the slowdown in the number of
restaurants signing up for its services. The
number of North American restaurants using
OpenTables platform rose 19 percent to 23,862
in the quarter, but growth was slower than in the
previous two quarters. The number of restaurants
using its service outside the United States
fell. OpenTable, which gets 1.00 from a
restaurant if a diner reserves a table through
its website or app, will continue to operate as
an independent business led by its current
management, Priceline said. Up to Thursdays
close, OpenTables stock had fallen about 11
percent this year.