Join        Login             Stock Quote

Kayak Software (KYAK) Lowered To 'Hold' By Deutsche Bank After Priceline (PCLN) Acquisition

 November 09, 2012 02:29 PM

(By Balachander) Kayak Software Corp. (NASDAQ: KYAK) shares were lowered to "Hold" from "Buy" by Deutsche Bank analyst Lloyd Walmsley after the online travel site agreed to be acquired by Priceline.com Inc. (NASDAQ: PCLN) for $40 per share in cash/stock.

Walmsley raised price target on the stock to $40 from $37.

The analyst believes the deal helps KAYAK with two big initiatives: 1) it puts Priceline in the booking path and 2) helps with international expansion. Furthermore, we believe there are significant revenue synergies between the two companies.

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

Furthermore, Walmsley believes there are significant revenue synergies between the two companies.

"We think there is a less than 20 percent chance another bidder would enter the fray," Walmsley wrote in a note. "Expedia (NASDAQ: EXPE) would be the only other company that would make sense, and would have had multiple opportunities to acquire KYAK in the past if it really wanted to."

"Google (NASDAQ: GOOG) is also unlikely given the overlap in meta-search strategies, and more importantly, the regulatory scrutiny," Walmsley said.

[Related -Expedia Inc (NASDAQ:EXPE): A Look At Underappreciated Meta-Search Asset]

"Risks on the downside include the transaction not being approved for regulatory scrutiny, which we see as a low probability given the $250m domestic revenue run rate vs. the $3B domestic travel ad market," the analyst wrote. "Upside risk includes a higher acquisition offer."

Shares jumped 27.71 percent to trade at $39.64 on Friday. Over the past year, the stock has been trading between $26.01 and $40.41.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageThe Sixty Percent Alibaba Play No One Is Talking About

It's official: Chinese e-commerce juggernaut Alibaba (NYSE: BABA) goes down as the biggest U.S. IPO in read on...

article imageThe Finer Points Of Hedging… Or Not

Barry Ritholtz asks the right question—Why hedge?–in the wake of last week’s announcement that California read on...

article imageBulls Leverage Hopeful News to Launch a Tepid Breakout Attempt

Stocks were able to leverage some optimistic news and dovish words from the Fed to take another stab at an read on...

article imageG-20 Minus One Country Plus 900 Bullet Points Equal 2 Percentage Points of Extra Growth?

For investors, the G-20’s super-secret plan to make the world grow faster is more a sideshow than a reason read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.