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Shares of Orbitz rocketed 27 percent in after-hours action on Tuesday after published reports said the online travel site was in talks to be purchased by Cendant for $26 to $28 per share, or more than $1 billion in cash.
Travel company Cendant, the owner of Avis and Budget car hire firms, is in advanced talks to buy travel website Orbitz for $1bn.
Orbitz was started by five US airlines in 2000 and floated on Nasdaq for $300m in December 2003. It competes with the likes of Expedia and Travelocity, offering flights, hotels and vacations. Shares jumped 25 per cent late last night on reports of an imminent takeover. Both companies held board meetings last night to decide on the deal, according to newswires.
[edited by: Brett_Tabke at 12:38 pm (utc) on Sep. 29, 2004]
[edit reason] added links [/edit]
One thing that many don't know is that orbitz drives the reservation systems of a few airlines, so they probably make hefty fees off every transaction at ual.com, for example.
Whether the brand is worth 1.2 billion...? I don't know.
Someday I'll sell my cr@ppy little site for 1.2 bln!
What gets me, is that Orbitz was started by the big 6. NOW they are in effect managing the feat of seling a channel to the backend that allows consumers to purxhase their product, while at the same time continuing to charge commission for every transaction.
Brilliant. It's too bad 2 out of six are doomed.