Priceline to buy Kayak Software for $1.8 billion
(Reuters) - Online travel agency Priceline.com Inc said on Thursday it will buy Kayak Software Corp in a friendly deal that values the company at $1.8 billion.
Priceline is offering $40 a share for Kayak, a 29 percent premium on the company's Thursday closing price of $31.04.
Kayak shares jumped 27 percent to more than $39 in extended trading, while Priceline.com moved lower.
Daniel Kurnos, an analyst at Benchmark Company, said the purchase would let Priceline.com participate more in the travel advertising space.
"Priceline had previously addressed that it was having issues in terms of marketing efficiencies," he said. "This certainly represents an investment for them in the paid-search, or the advertising channel, which is not an area where they've historically had a lot of exposure."
But Kurnos added the move also exposes Priceline.com more significantly to the volatile air travel market.
Kayak, which uses a website and a mobile site to help consumers compare prices for airlines and hotels, went public in July with shares priced at $26.
The deal expected to close late in the first quarter of 2013.
(Reporting by Karen Jacobs in Atlanta and Tej Sapru in Bangalore; Editing by Maju Samuel; and Peter Galloway)
NEW YORK - With the U.S. Federal Reserve finally announcing it will start tapering its stimulus, removing a big uncertainty in the market, can Wall Street expect a stronger finish to the year? Not really.
WASHINGTON - Start-up companies will be able to raise much more capital through certain public stock deals without facing costly regulatory burdens under a proposal announced by U.S. securities regulators on Wednesday.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.