Liberty Interactive Corp. (LINTA) bought about $300 million in shares of TripAdvisor Inc. (TRIP), gaining voting control of the online travel-review company from billionaire Barry Diller, who stepped down as its chairman.
Liberty purchased about 4.8 million shares at $62.50 apiece from Diller and the Diller-von Furstenberg Family Foundation, Liberty said today in a statement. The Englewood, Colorado-based company now has 57 percent voting control and 22 percent of total equity. The price represents a 63 percent premium over yesterday’s closing price of $38.39.
Diller, who acquired TripAdvisor in 2004, spun it off from Expedia Inc. (EXPE) last year into its own company. With today’s sale, he is giving himself more time for other things while staying on as a board member, Diller said in the statement. The move passes control to another billionaire entrepreneur, John Malone, who controls Liberty Interactive.
“Ever since we acquired TripAdvisor in 2004, it’s been one of the smoothest and most trouble-free growth stories I’ve ever known,” Diller said.
Shares of Newton, Massachusetts-based TripAdvisor jumped 6.6 percent to $40.91 at the close in New York, reaching the highest price since July. Liberty Ventures, the tracking stock within Liberty Interactive to which TripAdvisor common stock is attributed, rose less than 1 percent to $59.07.
Diller owns more than 4.6 million shares and voting control of Expedia. Today’s transaction is a potential precursor for another deal where Malone would buy out Diller’s stake in Expedia, Chris Marangi, a portfolio manager at Gamco Investors Inc. (GBL) in Rye, New York, said in an interview. Expedia climbed 4 percent to $60.
“There’s probably another shoe to drop here,” Marangi said. Malone will also be able to build a larger stake in TripAdvisor now that he has control, Marangi said.
Courtnee Ulrich, a spokeswoman for Liberty, didn’t immediately return a phone message seeking comment on whether the company would pursue an Expedia transaction or buy more TripAdvisor shares. Justine Sacco, a spokeswoman for Diller’s IAC/InterActiveCorp (IACI), declined to comment, and an e-mail to Expedia’s press office wasn’t immediately returned.
Between 2003 and 2005, Diller spent about $8 billion acquiring Expedia, Hotels.com, the deep-discount travel site Hotwire and TripAdvisor. TripAdvisor is now valued at about $5.9 billion, while Expedia is worth about $8.1 billion.
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