Expedia (Finally) Joins the USA Family

It took longer than expected, but online travel operation Expedia is now
officially majority-controlled by USA Networks Inc.
instead of Microsoft Corp. .


Shareholders of Bellevue, Wash.-based Expedia , which
continues to be publicly traded, approved the merger transferring ownership
of 33.7 million shares to USA from Microsoft.


Another 1 million shares were exchanged by other Expedia shareholders for a
package of USA securities, bringing USA’s ownership in Expedia to 34.7
million shares, or about 65 percent of the 53.7 million basic shares
outstanding, and representing 94.9 percent of the voting interest. USA valued
the shares at $26.80, which seems like a bargain now that Expedia has been
trading recently in the $50-plus range.


For each Expedia share, shareholders received 0.6009 shares of USA common
stock; 0.3779 shares of USA cumulative convertible preferred stock and 0.4229
USA warrants.


USA chief executive Barry Diller was named chairman as the Expedia board of
directors was expanded from seven members to 13. Richard Barton remains as
president and chief executive officer of Expedia.


The deal was announced last July and was valued at about $1.5 billion at the
time.


The
merger was delayed
when Vivendi Universal announced the
$10.3 billion acquisition of USA Networks’ entertainment (cable and movie)
assets. USA Networks Inc. will be renamed USA Interactive upon close of its
pending transaction with Vivendi, and will consist of Expedia as well as the
Home Shopping Network, Ticketmaster and Hotel Reservations Network, among
others.

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