InterActive Corp walks away from ebookers

Shares down

By Drew Cullen • Get more from this author

Posted in Financial News, 5th October 2004 13:07 GMT

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InterActive Corp today said it did not intend to buy ebookers, resulting in a fall in the UK travel business's share price.

In a statement to the London Stock Exchange, IAC said: "In light of recent speculation, IAC/ InterActiveCorp announces that it has decided not to participate in discussions relating to a possible offer for ebookers and does not currently intend to make an offer for ebookers."

IAC is the world's biggest online travel agent, owning Expedia and Hotels.com. The US dotcom conglomerate was considered the most likely buyer for ebookers, which came into takeover play following a profits warning in July. Last month ebookers said it was in talks concerning a possible takeover. So are there other possible bidders in the wings? ebookers is not saying.

Both ebookers and Lastminute.com, its closest UK rival, are in heavy cost-cutting mode, with ebookers axing at least 200 jobs this year, and Lastminute set to cut 350. Both companies have been highly acquisitive, so there are some integration savings to be made. But margins in the travel sector are down, and there is little slack for error. This week Brett Hoberman, Lastminute CEO, noted "challenging trading conditions in the industry during the summer quarter".

ebooker's shares this afternoon are down 4.7 per cent from 216.50p to 195p. ®