Priceline books $2.6 bn OpenTable deal

June 13, 2014
People eat at the terrace of an Italian restaurant in Miami Beach, Florida on October 11, 2011

Online travel giant Priceline said Friday it would buy the restaurant reservation service OpenTable for $2.6 billion in cash.

"OpenTable is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers," said Priceline Group's president and chief executive Darren Huston.

Priceline, which began as a service in which travelers bid for hotels and other travel options, has grown into a major brand with the hotel service Booking.com, aggregator Kayak and other websites.

OpenTable, which operates in the United States, Britain, Canada, Germany, Japan and Mexico, says it handles some 15 million reservations per month via online bookings across more than 31,000 restaurants.

The service allows users to see which restaurants are available, to view menus and customer reviews, and to book a reservation.

The deal, approved by both boards, calls for Priceline to pay $103 per share. OpenTable went public in 2009, raising some $60 million.

After the closing expected in the third quarter, OpenTable will continue to be headquartered in San Francisco, and will operate as an independent business led by its current management team, according to a statement from the two companies.

The news comes one month after US online ratings giant TripAdvisor announced it was acquiring France's LaFourchette, an online restaurant booking site with a network of more than 12,000 restaurants in Europe.

Analysts said the deal appears to be a good fit and could allow Priceline and OpenTable to expand globally.

"Importantly, OpenTable has a dominant position in the US but has faced challenges with its international operations, and we think Priceline can help accelerate OpenTable's adoption and progress internationally," said Justin Post of Bank of America-Merrill Lynch

Mark Mahaney at RBC Capital Markets said in a note to clients that the deal is "likely part of Priceline's move into offering a much broader range of local ecommerce services to what is a very attractive customer set (travelers)."

Mahaney said the move from hotel reservations to "total travel reservations" including dining and other activities is a natural extension for Priceline and added that "in this sense, we believe this deal is a no-brainer."

The research firm eMarketer said the deal for OpenTable "creates more potential revenue streams from search listings," which could take some market share from Google.

Explore further: OpenTable shares soar nearly 60 pct in IPO feast

Related Stories

OpenTable buys food photo-sharing app Foodspotting

January 29, 2013

Restaurant reservations site OpenTable says it is buying Foodspotting, a mobile app for finding and sharing photos of food, for about $10 million to help it personalize its service.

Recommended for you

Smart home heating and cooling

August 28, 2015

Smart temperature-control devices—such as thermostats that learn and adjust to pre-programmed temperatures—are poised to increase comfort and save energy in homes.

Smallest 3-D camera offers brain surgery innovation

August 28, 2015

To operate on the brain, doctors need to see fine details on a small scale. A tiny camera that could produce 3-D images from inside the brain would help surgeons see more intricacies of the tissue they are handling and lead ...

Team creates functional ultrathin solar cells

August 27, 2015

(Phys.org)—A team of researchers with Johannes Kepler University Linz in Austria has developed an ultrathin solar cell for use in lightweight and flexible applications. In their paper published in the journal Nature Materials, ...

Interactive tool lifts veil on the cost of nuclear energy

August 24, 2015

Despite the ever-changing landscape of energy economics, subject to the influence of new technologies and geopolitics, a new tool promises to root discussions about the cost of nuclear energy in hard evidence rather than ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.