Priceline Reserves OpenTable For $2.6 Billion, Reservation Site Shares Skyrocket

Forbes

Hotel booking giant Priceline Group announced Friday morning that it will acquire OpenTable for $2.6 billion. Priceline -- parent company of booking.com, priceline.com, agoda.com, kayak.com and rentalcars.com -- will pay $103 per share in the all cash transaction, a 46% premium over the restaurant reservation platform's closing price Thursday.

OpenTable shares were up almost 47% to $103.31 in pre-market trading setting the stock up to easily cross a multi-year high at the open. Priceline was up less than 1% to $1,234.

"OpenTable is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers," said Priceline CEO Darren Huston in a statement. Huston added that the deal will speed up OpenTable's global growth. The service is currently available across the United States but in only 18 other countries, while Priceline's bookings.com leading travel site in Europe.

"The Priceline Group is a leader in e-commerce innovation with global expertise in online marketing and digital customer conversion across devices, and they have an exceptional track record of customer service in dozens of languages around the world," said Matt Roberts, CEO of OpenTable.

In a note on the results Citi analyst Mark May pointed out that the deal could also help Priceline take the lead in a recent trend of online travel companies offering activities beyond transportation and lodging.

Several related stocks were also popping in pre-market trading following the announcement. As investors negotiated what the deal means for the intersection of food and e-commerce shares of restaurant review site Yelp rose almost 11% to $73 while digital deal site Groupon and food delivery site GrubHub shares gained about 9% each to $6.55 and $36.70 respectively. On this May noted, "We believe this transaction highlights the value of online marketplace models (especially those with a bookings and/or payment connection with buyers and sellers) and note that the other companies in our universe with similar traits are GrubHub and Yelp."

The Priceline, OpenTable deal is expected to close in the third quarter of this year. OpenTable will operate as an independent company and not management changes have been announced.

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