USA Interactive, the ecommerce company owned by TV and home-shopping tycoon Barry Diller, saw a run on its stock Monday after making an unsolicited $4.5 billion (€4.76bn; £3.07bn) bid for blocks of shares in three online travel and ticketing operations in which Diller already has extensive holdings.
Following announcement of the offer, USAi shares dove 8% to $26.22. Investors were not enthused by Diller’s move, some seeing it as a reckless gamble in the still-turbulent waters of ecommerce.
But Diller – a Phi Beta Kappa at selling high and buying low – is a canny calculator of the odds as his track record with Paramount and Fox demonstrates. He also claims that the web arm of his Home Shopping Network is second only to eBay in terms of online profitability.
Fixed in Diller’s sights are Expedia, Ticketmaster and Hotels.com – companies in which USAi is already a major investor. The bid is made at a premium of only 7.5% over Friday’s closing price – a resistible offer, some believe.
Diller frankly acknowledges this: “There will be lots of talk about whether the premiums we have offered are fair. We, of course, think they are, given the stock prices of our subsidiaries and USA in relation to each other.”
Data sourced from: Financial Times; additional content by WARC staff