Share “Priceline negotiates $1.8 billion Kayak deal”

Priceline negotiates $1.8 billion Kayak deal

Associated Press Modified: November 8, 2012 at 6:31 pm •  Published: November 8, 2012

Priceline said that Kayak will continue to operate independently as a Priceline Group company.

"Kayak has built a strong brand in online travel research and their track record of profitable growth" shows the company's "popularity with consumers and value to advertisers," said Priceline CEO Jeffery H. Boyd.

Kayak also reported Thursday that third-quarter earnings jumped on higher sales.

Net income rose to $7.2 million, or 19 cents per share, from $4 million, or 18 cents per share, a year earlier. The company said it would have earned 26 cents per share excluding stock-based compensation and certain other costs. Analysts surveyed by FactSet expected 19 cents per share.

Revenue rose 29 percent to $78.6 million, topping analysts' $77.4 million forecast.

On Thursday, Kayak shares dropped 50 cents, or 1.6 percent, to end regular trading at $31.04. After news of the deal was announced, they jumped $8.32, or 27 percent, to $39.36 in after-hours trading.

Priceline shares closed at $627.87, down $6.74 or 1 percent. In after-hours trading, they dropped $13.87, or 2.2 percent, to $614. Shares of rival Expedia Inc. fell 4 percent after-hours on the news but Orbitz Worldwide Inc. surged 13 percent to $2.39.