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Priceline flies into the restaurant business with $2.6 billion OpenTable deal

Priceline flies into the restaurant business with $2.6 billion OpenTable deal

Laura Lorenzetti

@FortuneMagazine

JUNE 13, 2014, 8:13 AM EDT

Acquisition expands the traditionally travel-only booking site’s services.

Priceline is snapping up restaurant-reservation platform OpenTable for $2.6 billion in cash, expanding the traditionally travel-only booking site’s services.

Priceline  PCLN -1.82%  will pay $103 a share for the company, a 45% premium to OpenTable’s  OPEN 0.96%  $71.13 closing price Thursday, the company announced Friday. The deal should be completed in the third quarter.

“They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience,” said Darren Huston, CEO of the Priceline Group. “We look forward to helping the OpenTable team accelerate their global expansion.”

The online travel site has been buying its way to growth over the past decade, acquiring rivals Booking.com andKayak.com. This latest purchase will help the company go beyond cars, hotels and air flights. OpenTable brings with it nearly 15 million people that book reservations across 31,000 restaurants on its platform each month.

There’s “a lot of green space in international” for OpenTable, Huston said on a call with analysts Friday morning. This room for growth is part of the reasoning behind the healthy price premium, he said.

Currently, the restaurant booking operates in six countries, including the U.S. Priceline plans to use its infrastructure to expand OpenTable’s services globally and cross-market it with its existing booking customers.

“It’s critical to understand its the same customers, travelers are diners,” said Huston. “This is another leg of the stool for the Priceline Group.”

OpenTable, which is the leading global dining reservation platform, will continue to be headquartered in San Francisco, Calif., and will operate as an independent business with its current management team under the Priceline Group umbrella of companies.

Shares of other online platforms gained sharply in pre-market trading on the news, including Groupon  GRPN -1.07% , Yelp  YELP 0.11%  and Grubhub  GRUB -5.16% .

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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