Priceline Adds New Airline Partners
Page 1 of 1
Priceline.com Inc. Wednesday added three major airlines to its "name your price" leisure ticket service.
The companies joined Delta Air Lines, which restructured its priceline.com equity position. Priceline (PCLN), which is giving the new partners equity in exchange for their membership, will record a one-time, non-cash charge of approximately $1.1 billion in the fourth quarter to pay for the deal.
"We view this addition of three major domestic airlines as an extremely strong endorsement of the value of priceline.com's system to our airline partners, both as an incremental revenue producer and a long-term strategic equity asset," said Richard S. Braddock, priceline.com's chairman and CEO.
Also, Delta will exchange 6 million shares of priceline common stock for an equal amount of newly-issued convertible preferred stock that may be converted into priceline.com common stock. After the deal, Delta hold approximately 8.5 million common Priceline shares. In addition, Delta will receive new warrants to acquire 5.5 million shares of priceline common stock at an exercise price equal to last Friday's closing price of priceline shares.
Priceline has issued warrants totaling 20 million shares to domestic airline partners which carry an average exercise price of $56 a share, representing approximately 10 percent of the fully diluted common stock of priceline.com.