IAC Confirms Ask Jeeves Buyout
IAC will issue 1.2668 shares for every Ask Jeeves share, valuing Ask Jeeves at about $28.24. The shares closed Monday at $24.24 and were halted for premarket trading at $28.05. IAC also said it will buy back about 60% of the shares it issues in the transaction under a previous repurchase authorization.
IAC expects the acquisition to be accretive to 2005 adjusted EPS, assuming the buyback at the 60% level.
IAC is in the process of splitting itself into two companies, one housing its online travel reservation businesses, the other its remaining electronic-commerce segment. Ask Jeeves will become part of its online commerce division, which already includes Ticketmaster, HSN, LendingTree and CitySearch.The deal allows Ask Jeeves to remain an independent brand with Steve Berkowitz remaining as CEO. It is expected to close late in the second quarter or early in the third quarter of 2005, prior to IAC's spinoff of the travel businesses. IAC said it would boost Ask Jeeves' distribution, research and technology budgets, increase its local offerings and integrate IAC's brands and offerings into the Ask Jeeves properties. It pledged to promote Ask Jeeves' search box on all of its sites.
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