Aug 6 (Reuters) - Travel website owner Priceline Group Inc will invest $500 million in Chinese online travel company Ctrip.com International Ltd to broaden options for both companies in China.
Shares of Ctrip rose about 8.6 percent in after-market trading to $65.65 while that of Priceline’s were little changed.
The investment will be made through a convertible bond and Priceline has acquired the right to acquire Ctrip shares in the open market over the next 12 months, the companies said in a statement.
Priceline, which would hold about 10 percent stake of Ctrip through the combination of shares and convertible bonds, would also get the right to appoint an observer to the Ctrip board.
The investment comes less than two months after Priceline bought restaurant reservation website operator OpenTable Inc for $2.6 billion to broaden its services outside the increasingly competitive online travel industry.
The investment would help Ctrip customers to reach Priceline’s portfolio, which exceeds 500,000 accommodations outside of the Greater China Region. Priceline customers will be able to reach Ctrip’s more than 100,000 accommodations in the Greater China Region.
Priceline shares closed at $1,280.57 while Ctrip shares closed at $60.45 on Wednesday on the Nasdaq. (Reporting by Avik Das in Bangalore; Editing by David Gregorio)