July 14, 2014 0 Comments
A win-win deal for Wotif and Expedia
Last week, US-based Expedia, the largest online travel company in the world, announced its takeover of Wotif, an Australian-based online travel-booking pioneer for a total cash consideration of A$703 million (US$658 million). The takeover, which is yet to be approved by shareholders and cleared by regulators, will cover all Wotif brands including, Wotif.com, lastminute.com.au, Asia Web Direct, LateStays.com, and Arnold Travel Technology. The offer comes as Wotif struggles with declining profitability with the company expecting a net profit of A$43 million for 2013/14, a forecast that is way behind their A$51 million net profit in 2012/13 and $58 million the year before. For Wotif, joining Expedia will allow the company to fortify its offshore travel inventory as well as solve its technology issues. The deal will also be a win for Wotif shareholders as Expedia proposes to pay A$3.30 per share, representing a 30% premium to Wotif’s closing price on the Australian stock market in early July. For Expedia, the acquisition will allow the travel juggernaut to expand its market share of the Australian online travel market as well as increase its foothold in Southeast Asia, a highly coveted market.
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