USAI to Buy Rest of Ticketmaster Shares
In a step toward uniting the various electronic commerce companies controlled by USA Interactive, Chairman Barry Diller announced Thursday that the company will purchase the shares of Ticketmaster it does not already own.
But the $730-million deal falls far short of accomplishing Diller’s goals.
USAI also announced it is ending efforts to buy the outstanding shares of its two other publicly traded subsidiaries, Expedia Inc. and Hotels.com, after the boards of those companies dismissed USAI’s overtures.
Though bringing Ticketmaster within USAI is a welcome event, Vice Chairman Victor Kaufman said he was disappointed that USAI could not close similar deals with the other two firms it controls but does not wholly own.
“We needed the independent directors who represent the minority shareholders to agree to the proposal and we never were able to get the energy level” to that point, Kaufman said.
Expedia and Hotels.com remained independent, C.E. Unterberg, Towbin analyst Bailey Dalton said, because their shares are appreciating faster than USAI’s.
In contrast, “Ticketmaster is a more mature company with less growth potential,” Dalton said, noting that those shareholders had more to gain from the deal.
The noncash deal values shares in the Los Angeles-based company’s ticket, dating service and city listings businesses at $15.17.
Ticketmaster’s shareholders will receive 0.935 share of USAI common stock for each Ticketmaster common stock they own, a 20% premium on the 20-day average ratio of Ticketmaster to USAI stock prices leading up to the initial June 3 offer.
That’s an improvement over USAI’s initial offer of $4.5 billion, which represented a 7.5% premium. USAI holds a 66.5% equity stake in Ticketmaster and subsidiaries Match.com and Citysearch.
In Thursday’s trading, Ticketmaster shares rose $3.35, or 26.6%, to $15.95, USAI climbed $1, or 6.2%, to $17.22, Hotels.com rose $5.19, or 12.2%, to $47.85, and Expedia gained $3.76, or 9.5%, to $43.43, all on Nasdaq.
Despite the setback, Diller told analysts Thursday that “there was no chance” USA would divest its interests in Hotels.com or Expedia and that online travel would continue to be an important area for the company.