Expedia Posts Narrower-Than-Expected Loss, Buys Two Net Properties - TheStreet

Expedia Posts Narrower-Than-Expected Loss, Buys Two Net Properties

The Microsoft spinoff will buy Travelscape.com and VacationSpot.com.
Author:
Publish date:

Internet travel company

Expedia

(EXPE) - Get Report

announced Monday that it planned to buy two Internet lodging companies and posted a loss of 16 cents a share for its second fiscal quarter.

Expedia, which was spun off by

Microsoft

(MSFT) - Get Report

in an initial public offering in November, said it was acquiring

Travelscape.com

and

VacationSpot.com

for stock and other securities that it valued at a total of $177 million.

Under the terms of the deal, Expedia will issue approximately 2.6 million shares and options valued at about $82 million in exchange for VacationSpot.com, an online hotel-reservation service.

It will also issue stock, options and warrants valued at about $95 million for Travelscape.com, an online lodging discounter, and assume about $8 million in long-term debt.

Richard Barton, the CEO of Expedia, said in a statement that combining "the broad and unique selection of getaways from VacationSpot.com, discounted hotel rates from Travelscape.com, and the Expedia hotel directory" would create the largest lodging offering on the Internet.

VacationSpot.com and Travelscape.com had pro forma revenues totaling about $27 million for the quarter ended Dec. 31.

Expedia said it expects to incur transaction expenses of about $4 million from the acquisitions.

Expedia also posted a loss, excluding charges, of $5.9 million, or 16 cents a share, in its first quarter as a publicly traded company, as revenue surged 127% to $17.8 million.

Including the charges for stock options, the company reported a net loss of $23.18 million, or 64 cents a share, in the current quarter, compared with a net loss of $5.45 million in the quarter a year earlier. Expedia did not report a pro forma per-share number for the year-earlier quarter.

The one analyst surveyed by

First Call/Thomson Financial

had expected a loss of 29 cents a share. It was not immediately clear if the forecast by the analyst, who was not identified, included or excluded the charges.

Instinet

reported that Expedia's stock price was unchanged in after-hours trading at 27 1/4 since being halted prior to the announcements. But

Island ECN

reported that Expedia's stock soared to 36 1/4. The shares had slipped 1 3/4, or 6%, in regular trading on Monday.

Microsoft retains an 80% stake in Expedia.