Priceline Group Inc. (PCLN) Buying Open Table Inc. (OPEN)

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The Squawk Box crew of CNBC Television reports that Priceline Group Inc. (NASDAQ:PCLN) has finalized its acquisition of Open Table Inc. (NASDAQ:OPEN) for $2.6 billion. This amounts to $103 per share in cash, which is a whopping 46% premium above yesterday’s closing price of the Open Table’s shares.  So what is in it for Priceline?  The answer is simple: Growth.  Open Table has a base of close to 15 million users who are known to be booking restaurant tables in over 31,000 restaurants.  In addition to such a vast user base and network, Open Table has potential for growth through mobile bookings and also by simply buying restaurants internationally. By using mobile platforms, the push definitely is to catch the customers when they are on the move.

priceline.com

Historically, Priceline Group Inc. (NASDAQ: PCLN) has followed an inorganic growth strategy, Squawk Box said. As a travel company, Priceline has had a great track record of acquiring travel websites like Kayak.com and Booking.com. Open Table which is the sixth acquisition for Priceline, is however in the restaurant business. Priceline sees this as a natural extension of its business, since both companies deliver excellent digital booking experience for their customers and also provide supreme marketing solutions for their business partners.

It is these types of acquisitions that have propelled Priceline ahead with a double digit percentage growth.  While a travel company buying a restaurant booking company may look a bit strange to observers, there is a precedence.  It actually looks like an uncanny coincidence. The Open Table Inc. (NASDAQ:OPEN) acquisition follows closely on the heels of another similar deal done recently where the travel company Tripadvisor Inc. (NASDAQ:TRIP) acquired a French restaurant reservations platform of the company Lafourchette.

With this deal going through, Priceline Group Inc. (NASDAQ:PCLN) would see competition from Tripadvisor Inc. (NASDAQ:TRIP) and Yelp Inc. (NYSE:YELP) in the restaurant business.

Waterstone Capital Management run by Shawn Bergerson and Martin Kalish, holds 40,738 shares of Priceline Group Inc. (NASDAQ:PCLN). Tiger Global Management Llc, led by Chase Coleman And Feroz Dewan also has 11% of its portfolio invested in Priceline.

John Thaler‘s Jat Capital Management, holds 802,598 shares of Open Table Inc. (NASDAQ:OPEN), worth $61.74 million.

Disclosure: none

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