Board prefers site's standalone prospects, rejects bid
Online travel agency Expedia has rejected a takeover bid from Barry Diller’s USA Interactive, saying it sees more potential for growth if it remains independent.In June, USA Interactive proposed a deal to acquire the 37% of Expedia that it doesn’t already own, offering a 7.5% premium for the shares. It is now down to a 6.3% premium. The offer was made as part of plans to also acquire USAI’s two other majority-owned e-commerce sites Hotels.com and Ticketmaster — with the idea of bringing its subsids under one roof to improve efficiency. But a special committee of Expedia’s board of directors declined the offer on Thursday, saying that the Bellevue, Wash.-based company’s “standalone prospects continue to be excellent. “Rather than trading at levels reflecting Expedia’s potential, it appears that Expedia’s stock price has inappropriately become linked to USAI’s stock price based on USAI’s statements,” the committee said. USAI could still force a sale, considering that the company owns 63% of Expedia. Shares of Expedia, which was founded by Microsoft and has grown into the leading Web site for online leisure travel bookings, have not seen much of a boost since USAI announced its buyout plans. On Thursday, Expedia closed at $58.99, while USAI ended trading at $23.25.
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