Expedia shares gain on Google takeover talk

CHICAGO (Reuters) - Shares of online travel agency Expedia Inc gained 5.18 percent to $7.71 on Tuesday on talk that the company might be a takeover target for Google Inc.

Google declined to comment on the speculation, which has been in the market for about a year. An Expedia spokeswoman did not immediately return calls seeking comment.

In the stock options market, Expedia's volume of calls, which give buying rights to the company's shares, has been heavy. Near midday, 7,958 calls traded, nearly 23 times the norm, according to option analytics firm Trade Alert.

Earlier this month, Expedia Chief Executive Dara Khosrowshahi noted that consolidation is less likely while credit markets remain so tight in the economic recession.

"Right now, access to capital markets is essentially nil and consolidation typically requires capital," Khosrowshahi said at the Reuters Travel and Leisure Summit when asked about the prospects for consolidation among online travel companies.

(Reporting by Kyle Peterson and Doris Frankel in Chicago and Alexei Oreskovic in San Francisco, editing by Matthew Lewis)