NEW YORK -- USAI Interactive will buy the shares of Expedia it
doesn't already own in a deal valued at $3.3 billion.
USAI already owns 54% of Expedia.
For Expedia shareholders, it is nearly a 2-for-1 deal -- they
will receive 1.93875 shares of USAI common stock for each share of
Expedia they own.
Based on Tuesday's closing stock prices of USAI and Expedia, the
exchange ratio represents a 30% premium.
The timing of the deal appeared curious because of the impact an
imminent clash with Iraq could have on the travel industry, but
USAI chairman and CEO Barry Diller said, "The timing in relation to
world events is an accident -- as often happens with transactions,
they take the time they take to reach conclusion."
Diller also resigned as chief executive of Vivendi Universal
Entertainment, a joint venture formed by USAI and Vivendi Universal
last year. The joint venture owns the Universal Studios theme
parks.