Priceline is buying online restaurant reservation company OpenTable for $2.6 billion. The deal should help Priceline, the online travel company, branch out into a new business segment.
Priceline will pay $103 per share, which is a 46% premium to OpenTable’s Thursday closing price of $70.43.
OpenTable’s stock soared 47% to $103.42 in premarket trading before the market open on Friday.
Priceline President and CEO Darren Huston said in a statement that OpenTable gives it “a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers.”
OpenTable seats more than 15 million diners per month at more than 31,000 restaurants. The company will still be based in San Francisco and will operate as an independent business led by its current management team.
At Priceline, an average of more than 1 million guests stay in accommodations booked through one of brands each night. It has more than 480,000 properties in more than 200 countries and territories worldwide.
The Norwalk, Connecticut, company changed its name from Priceline.com Inc. to Priceline Group Inc. in April to better reflect its overall business. Its brands include Booking.com, priceline.com, agoda.com, KAYAK and rentalcars.com.
Both companies’ boards unanimously approved the transaction, which is targeted to close in the third quarter.
Shares of Priceline fell 0.9% to $1,215 in premarket trading.
SOURCE: The Associated Press