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Priceline Investing $500 Million in Chinese Online Travel Agent

Wednesday, 06 Aug 2014 06:45 PM

Aug. 6 (Bloomberg) -- Priceline Group Inc., the largest online travel agent in the U.S., will invest $500 million in Ctrip.com International Ltd. to broaden the companies’ options in China.

Priceline and Ctrip, which have had a commercial partnership since 2012, will increase their cross-promotion of each company’s hotel inventory and other travel services, the companies said today in a statement.

Ctrip, China’s biggest travel website, is expanding its hotel-booking business as sales increase. Chinese revenue per available room rose 7 percent in May, the highest growth since 2010, according to Bloomberg Intelligence. Ctrip’s total sales climbed 38 percent to about $276 million in the second quarter, according to a statement July 30.

Priceline’s investment, through a convertible bond and an agreement to buy Ctrip shares on the open market over the next year, means the company may own as much as 10 percent of Ctrip.com, which is listed on the Nasdaq Stock Market. With the purchase of the convertible bond, Priceline has the right to name an observer to Ctrip’s board.

Ctrip, based in Shanghai, dropped 1.7 percent today to $60.45, giving the company a market value of $7.8 billion. Priceline, based in Norwalk, Connecticut, closed at $1,280.57 in New York, for a market value of $67 billion.

To contact the reporters on this story: Jennifer Surane in New York at jsurane4@bloomberg.net; Jing Cao in New York at hcao38@bloomberg.net To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Elizabeth Wollman, Reed Stevenson

© Copyright 2017 Bloomberg News. All rights reserved.

   
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Wednesday, 06 Aug 2014 06:45 PM
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