By Dow Jones Business News,
July 06, 2014, 09:15:00 PM EDT
SYDNEY-- Expedia Inc. bid 703.1 million Australian dollars (US$657.2 million) for Wotif.com Holdings Ltd. as the U.S.
online-travel site widens its exposure to fast-growing Asia-Pacific markets.
Expedia offered A$3.30 a share, including a special dividend of 24 Australian cents, representing a 25% premium to
Wotif's last traded price of A$2.64.
The deal was embraced by Wotif's board, with shareholders owning a combined 35.7% of the company--including founder
Graeme Wood--already stating their intention to accept the offer.
Wotif shares jumped to match the offer price. The shares had been sliding since the Australian company announced a
profit downgrade in December, as marketing costs climbed in the face of competition from global rivals including Expedia
Australian retailers as a whole have been under pressure from a slump in consumer confidence as the economy struggles
against a slowing mining boom, and after tough budget measures were announced this year to help trim national debt.
On Monday, Wotif said it expects net profit for the year just ended in June to be A$43 million, down from A$51 million
in the previous year.
Still, the company has the potential to improve its financial position, partly owing to its strong brand and rising
room rates, Credit Suisse analyst Chris Smith said in a client note earlier this month.
Wotif will "enhance our Asia-Pacific supply," Dara Khosrowshahi, Expedia's chief executive, said in a statement. Wotif
owns several other brands, including lastminute.com.au and Asia Web Direct.
Buying popular rival brand names can help Web-based companies stay near the top of results in search engines, such as
those offered by Google Inc.
Write to Ross Kelly at firstname.lastname@example.org
(Corrections & Amplifications--This article was corrected at 2343 GMT to reflect that the value of the takeover is A$
703.1 million. The original headline and first paragraph incorrectly said A$1.84 billion.)
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