Online shake-up ahead as Expedia moves to acquire Wotif

Online shake-up ahead as Expedia moves to acquire Wotif
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Online retailer Expedia is to acquire the Australia-based Wotif Group in a $703.1 million deal that is set to dramatically shake-up Australia’s online marketplace.

The sale will encompass all Wotif brands including Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au and Arnold Travel Technology. 

Wotif chairman David McIlwain said the board had carefully considered its options and had found the sale of the company “at a significant premium” was in the best interests of shareholders. The sale price of $3.30 per share represents a premium of approximately 30% to Wotif Group's average share price for the five trading days leading up to and including July 4.

“As a board we have carefully assessed the changing dynamics of the markets in which we operate, and the uncertainties and risks that we would face if we were to continue as an independent company,” McIlwain said.

“With that in mind, we believe that shareholder value will be maximised and that Wotif Group will be best positioned for the future through the proposed transaction.

“The Expedia group is well placed to leverage and support our strong brands, operations, people and customer relationships in an online travel market that is becoming increasingly global.”

Wotif managing director and chief executive Scott Blume expected the deal to enable the group to rapidly advance two of its strategic goals – to strengthen offshore supply and improve its value proposition through enhanced technology,

"We believe this will help solidify our position as the premier travel brand in Australia and New Zealand, grow our business across the Asia-Pacific region and increase our exposure and brand awareness to inbound international travellers," he said.

Meanwhile, Expedia president and chief executive Dara Khosrowshahi said the acquisition would benefit both companies by “leveraging the unique strengths each brings to the table.”

“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," he said.

In the six months to December 2013, the Wotif Group recorded $593 million in gross bookings and $76 million in revenue. It will reveal its financial results for the financial year ending June 2014 in mid-August with the online retailer expecting full year revenue in the order of $149 million, based on current estimates.

Subject to shareholder and regulatory approval, the deal will be completed in the final quarter of 2014.

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