US travel booking giant Expedia is expanding its presence in the Asia Pacific region after announcing a deal to buy Australia-based online hotel and travel booking company Wotif Group for A$703 million.
The 13-year-old company is listed on the Australian Securities Exchange, has offices in nine countries and counts Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, and GoDo.com.au among its businesses. The deal works out at $3.30 per share, which is around a 30 percent premium on the valuation of the company based on last week’s trading.
The Wotif Group handled 3.2 million rooms during the second half of 2013 and counts over 29,000 hotels across its sites. Though it recorded $593 million in total bookings and made $76 million in revenue during the second half of 2013, it has struggled with increased competition and a strong Australia dollar. The group’s share price is down 42 percent over the past 12 months.
Wotif founders Graeme Wood and Andrew Bice have also agreed to sell their respective 20 per cent and 15.5 per cent shareholdings.
Expedia group president and chief executive, Dara Khosrowshahi said that Wotif Group is well positioned in the Asia-Pacific region with a portfolio of leading travel brands, “This acquisition will allow both companies to continue driving growth opportunities by leveraging the unique strengths each brings to the table,” Ms Khosrowshahi said.
“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.”
Accommodation Association of Australia CEO Richard Munro said “The Accommodation Association of Australia expectations would be that the competitiveness of the online distribution agencies remain, ensuring that accommodation operators are able to access the best global distribution systems to customers. We would also expect that reasonable transaction cost for accommodation operators would be a focus for this new proposed entity and for that matter any online agency to ensure consumers are receiving the best outcomes on price.”
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