By Lisa Beilfuss
Priceline Group Inc. on Tuesday said it would increase its
investment in Ctrip.com International Ltd., as the online travel
company seeks a larger footprint in the world's largest
outbound-travel market.
Priceline said it would invest $250 million in Ctrip through a
convertible bond after making a similar $500 million investment
last summer. Assuming conversion of the two bonds, Priceline will
own about 10.5% of Ctrip's shares outstanding.
Shanghai-based Ctrip also granted Priceline permission to
increase its stake to 15% by acquiring Ctrip's American depositary
shares in the open market.
"Ctrip continues to be a very important partner for The
Priceline Group in China, and we look forward to continuing to
build upon that partnership," said Priceline Chief Executive Darren
Huston. "We consider Ctrip a market leader in China and we're
investing in a company and a team that we believe fits well with
our long-term view of China as a market and the Chinese people as
global travelers."
Under the existing commercial partnership, Priceline's
Booking.com hotel-booking site advertises Ctrip's inventory of
hotels in China. Ctrip, meanwhile, is able to offer its users a
wider array of deals from Priceline's platforms, including
Booking.com, Agoda.com for smaller hotels, OpenTable for
restaurants and rentalcars.com. The companies on Tuesday said they
would continue cross-promotion between brands.
Last week, Expedia Inc. sold its 62.4% majority stake in Chinese
mobile and online travel service eLong Inc. to a group of buyers
that included Ctrip, which said it took a 37.6% stake in eLong for
about $400 million. Growing losses at eLong had weighed on profits
at Expedia, which is awaiting regulatory approval of its $1.3
billion tie-up with fellow online travel booker Orbitz Worldwide
Inc.
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