NEW YORK (The Deal) -- Online travel company Expedia (EXPE - Get Report) said on Sunday it had agreed to buy Australian peer Wotif.com Holdings Ltd. for A$703 million ($658 million) to expand its footprint in Asia Pacific.
The Bellevue, Wash. company said it would offer A$3.30 per Wotif share, or 25% more than the target's A$2.64 closing price on Friday, though the offer includes a A$0.24 special dividend to be paid by Wotif before the transaction closes. The scheme of arrangement takeover remains dependent on an independent expert deeming it fair and on Wotif shareholders' approval, but the target's stock closed up A$0.65 at A$3.29, suggesting investors are confident the deal will close.
Wotif's websites include Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au and Arnold Travel Technology. Wotif said on Monday it expects to report revenue of A$149 million in the year ended June 30, and Ebitda of A$71 million. It agreed to the offer from Expedia after hiring Goldman, Sachs & Co. to review its options.
"After careful consideration of all options available to maximise shareholder value, the Wotif board has unanimously concluded that a sale of the company at a significant premium to market value, and on terms which we believe reflect fair value is in the best interests of all shareholders," said Wotif Chairman Dick McIlwain in a statement.
For Expedia, the deal follows a period of heavy investment in technology punctuated by strategic partnerships and some M&A. In June it agreed to expand in Europe by buying German online car rental reservation business AutoEscape Group from shareholders including Montefiore Investment, and in December 2012 it agreed to pay 477 million euros ($648.6 million) for 62% of German metasearch site operator trivago GmbH.
"Wotif Group will add to our collection of travel's most trusted brands and enhance our Asia-Pacific supply, while Expedia will expose Wotif Group's customers to our extensive global supply and world-class technology," Expedia President and CEO Dara Khosrowshahi said in a statement.
The conditional takeover agreement is expected to close in the fourth quarter.
In the meantime Wotif has entered into a "no shop" arrangement with Expedia and also given the U.S. group the right to match any competing bid that may emerge. A breakup fee of the standard 1% is payable in some circumstances, but not if the independent assessor decides the offer isn't fair or if shareholders vote it down.
Wotif founders and directors holding 35.7% of the share capital have provisionally agreed to tender their stock to the takeover.
Wotif's advisers at Goldman are the bank's Sydney-based TMT team, led by Joseph Fayyad. Clayton Utz is Wotif's legal adviser.