USA Networks closes acquisition of online travel concern Expedia

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Posted 4:19PM on Tuesday, February 5, 2002

BELLEVUE, Wash. - USA Networks Inc. has completed its acquisition of Internet travel company Expedia Inc., boosting USA's presence in the online travel market. USA Networks chairman and chief executive Barry Diller will become chairman of the Expedia board. Under the agreement, originally announced in July, USA obtained a 65 percent stake and a 94.9 percent voting interest in Expedia, which offers a range of travel information and services. At the time the deal was announced, USA also agreed to acquire a small travel company, National Leisure Group. The value of the two acquisitions and early start-up costs on a new cable-TV travel-commerce channel was said at the time to be close to $2 billion, The Wall Street Journal reported. Shareholders of Expedia, Bellevue, Wash., approved the transaction, the company said Tuesday. Expedia said Microsoft Corp.'s 33.7 million shares were transferred to USA Networks, as were another 1 million shares from other Expedia holders. In exchange, holders, including Microsoft, received 0.6009 of one USA Networks common share, 0.3779 of one USA Networks cumulative convertible preferred shares and 0.4229 of one USA Networks warrant. Holders who didn't exchange their shares kept them and received 0.192 of a warrant for each share. Each warrant lets the holder purchase one Expedia common share for $52 through Feb. 4, 2009. Warrants will trade on Nasdaq under the symbol EXPEW. In total, Expedia said USA Networks issued 20.9 million common shares, 13.1 million preferred shares and 14.7 million warrants. The final exchange ratios in the transaction will be announced Thursday. In afternoon trading, shares of Expedia were at $51.30, up $1.16, or 2.3 percent, on the Nasdaq Stock Market. Shares of USA Networks were at $28.80, down 1 cent, or less than 1 percent, also on the Nasdaq.