Shares of Orbitz
could be acquired by Cendant
in a $1.2 billion deal, the Wall Street Journal and others reported late Tuesday.
Shares of Orbitz soared more than 25% in after hours trading to $26 a share. The New York Times reported that Cendant could pay as much as $28 a share for the company.
The deal would united the largest standalone online travel business with Cendant’s traditional hotel and rental car businesses. Cendant also owns Web properties, among them CheapTickest.com. Orbitz’s main competition has already been acquired — Expedia by InterActiveCorp
, and Travelocity by Sabre
Online travel has been a hot sector in recent years. According to the Travel Industry Association of America, nearly 64 million online travelers — 30 percent of the U.S. — used the Internet in the last year to get travel and destination information. Of that group, 44.6 million actually booked at least one travel service or product online.
The sector has remained strong despite the financial woes that have hit the airline sector in recent years. Orbitz itself was founded by American, Continental, Delta, Northwest and United, and the Times speculated that the deal could give the airlines some much-needed cash.
Competition in the online travel space has been growing, with Priceline
joining the fray and Yahoo
launching a travel site recently. Online travel company Travelzoo
has been one of the hottest stocks on Wall Street this year, but the stock fell 20% on Tuesday.
Stocks rose Tuesday as traders shook off rising oil prices and falling consumer sentiment to send stocks higher. A strong outlook from Dow component Caterpillar
helped, as did reports of strong growth in China.
The Nasdaq rose 10 to 1869, the S&P 500 climbed 6 to 1110, and the Dow gained 88 to 10,077. Volume rose to 1.4 billion shares on the NYSE, and 1.55 billion on the Nasdaq. Advancers led 22-10 on the NYSE, and 19-11 on the Nasdaq. Upside volume was 70% on the NYSE, and 53% on the Nasdaq. New highs-new lows were 191-51 on the NYSE, and 63-72 on the Nasdaq.
surged 7% to a new high as its quiet period ended and several analysts made upbeat comments on the company.
The IPO of WebSideStory
received a lukewarm reception. It priced at $8.50 a share and closed just above $9, but the company reduced its offering terms in recent weeks.
The second warning in a month from Cypress Semi
sent chip stocks to a 1% loss on the day and limited the Nasdaq’s gains.
rose on upgrades.
fell on downgrades.