Orbitz Worldwide share price jumps after Expedia pays $1.3bn to take on Priceline in online travel
Global online travel agency Expedia yesterday announced it would buy travel website Orbitz Worldwide, owner of Cheaptickets.com, for $1.34bn (£870m).
The deal marks the company’s third acquisition in four months, a strategic plan to take on online travel giant Priceline Group.
Last month, Expedia bought Texas-based Travelocity, shortly after acquiring the Australian reservation website Wotif.
Orbitz shareholders will get $12 per share from Expedia, 25 per cent up on its Wednesday closing price.
Though Expedia and Orbitz have a combined market value of little over $11bn, Priceline is worth about five times as much.
“It is a $1.3 trillion industry and is highly fragmented” Expedia’s finance chief told an analyst. “We are only a small player and our overall share is in single digits.”
Dara Khosrowshahi, Expedia’s chief executive, said: “This purchase will allow us to deliver best-in-class experiences to an even wider set of travellers all over the world.”
Orbitz’ share price jumped up more than 21.8 per cent to $11.72 yesterday, while Expedia saw its share price increase by 14.5 per cent.