Expedia Inc. (EXPE:US), an online travel-booking service, agreed to buy Australia’s Wotif.com Holdings Ltd. (WTF) for A$703 million ($658 million), seeking to expand its presence in the Asia-Pacific region.
Wotif investors will get A$3.06 a share from Expedia and also receive a special dividend of 24 cents, the Brisbane-based company said in a regulatory filing. Wotif shares climbed 25 percent to A$3.30 at 11:06 a.m. in Sydney, the highest level since Dec. 17.
Online-travel websites have been seeking revenue through acquisitions as more people book business trips and vacations online. Internet travel sales may reach $151.9 billion by 2016 from $107.4 billion in 2011, according to EMarketer Inc.
“It is a somewhat opportunistic takeover in that Wotif is going through a transformation at the moment,” Daniel Mueller, a Sydney-based analyst at Morningstar Inc., said by phone. “They’re upgrading technology systems. Wotif will be in much a stronger position in 2 years time.”
Mueller values Wotif at A$3.20 a share and said he wouldn’t be surprised if a competing offer emerges from Expedia’s rivals such as Norwalk, Connecticut-based Priceline Group Inc. (PCLN:US) as the acquisition price, while attractive, isn’t overvalued.
“Wotif Group will add to our collection of travel’s most trusted brands and enhance our Asia-Pacific supply,” Dara Khosrowshahi, chief executive officer of Bellevue, Washington-based Expedia said in a statement. “Wotif Group is well positioned in the Asia-Pacific region with a portfolio of leading travel brands.”
Wotif expects net income of A$43 million on revenue of A$149 million for the year-ended June 30 and plans to issue its full-year results next month, the company said in the statement.
The transaction is subject to shareholder and regulatory approval and is expected to close in October, it said.
Wotif is advised by Goldman Sachs Group Inc. and law firm Clayton Utz.
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