Priceline announced today that it is buying the restaurant reservation service OpenTable for $2.6 billion in cash, representing a 46% premium over OpenTable’s closing price in the stock market on Thursday.
That’s a is Hugh premium and it represents a very aggressive valuation of a company that lost $3.6 million on $53 million in revenue in the first quarter of this year.
“OpenTable is a great match for The Priceline Group,” said Darren Huston, Priceline’s chief executive. “They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers.”
Priceline, which is based in Norwalk, Conn., has an average of 1 million customers a month who book hotel rooms, air travel and rental cars through its handful of brands, including Kayak.com and Booking.com.
The acquisition will give Priceline access to OpenTable’s client base of about 31,000 restaurants, which pay a fee to use OpenTable’s dining reservation software. About 15 million diners a month use OpenTable.
Huston believes there’s room for growth. “We look forward to helping the OpenTable team accelerate their global expansion,” he said in a statement.
The deal is expected to close in the third quarter of this year.
Shares for Priceline were slightly down Friday, falling $20.92, or 1.71%, to $1,205.08 in midday trading.
OpenTable shares were up $33.07, or 47%, to $103.50.
