Expedia Up 16% on News of $3.5B Buyback

Shares of Expedia were last up 16.2% to $29.64 in pre-market trading on news the company intends to repurchase up to 116.7 million shares, or approximately 42% of common stock outstanding. The buyback will be in a price range of $27.50 - $30.00, representing an 8% to 18% premium over its $25.50 close Monday. It will commence during the week of June 25 and expire (unless extended) the week of August 6. "With this action, we couldn't be clearer that the management and the Board of this company are confident in the value of Expedia and in its long term future," said Chairman Barry Diller in a press release. Expedia said it will use a modified "Dutch auction," allowing shareholders to indicate how many shares and at what price within the company's specified range they wish to tender. Liberty Media, which owns a 15.7% stake in Expedia, said it does not plan to sell its shares.

Sources: Press release, Reuters
Commentary: Expedia: How About A Leveraged Buyback? • Expedia Up On Speculation It Will Go Private • Expedia Looks Hot Going Into Summer Travel Season
Stocks/ETFs to watch: Expedia, Inc. (EXPE), Liberty Media Capital (LCAPA). Competitors: Travelzoo Inc. (TZOO), Priceline.com Inc. (PCLN). ETFs: PowerShares Dynamic Leisure & Entertain (PEJ)
Conference call transcripts: Expedia Q1 2007

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