USA Interactive to buy LendingTree
CHARLOTTE, N.C. (AP) – Barry Diller is adding another piece to the online mosaic of USA Interactive on Monday with an agreement to purchase LendingTree Inc. for up to $734 million in stock. The deal, which is expected to close by late summer, puts his company, which already controls the online travel services Expedia and Hotels.com, in the Web-based real estate loan business.
USA Interactive also owns Ticketmaster and the Home Shopping Network.
“For several years now we have been saying that the most exciting sector is in both financial services and real estate,” Diller, chairman and chief executive of USA Interactive, said in a statement. “We waited appropriately long enough to find the perfect solution – LendingTree.”
Diller, a longtime entertainment industry figure who headed the Fox and Paramount studios, has in recent years championed the possibilities of marrying entertainment and electronic commerce.
LendingTree operates a lending exchange which matches borrowers with more than 200 brokers, banks and other lenders. It doesn’t make loans itself.
The deal is subject to the approval of LendingTree shareholders. LendingTree’s board of directors approved the acquisition.
Doug Lebda, who founded LendingTree in 1996 and serves as its chief executive, and Tom Reddin, president and chief financial officer, would continue in their current positions, both companies said.
“This will create the opportunity for us to accelerate our growth in the consumer lending and real estate,” Lebda said.
Charlotte-based LendingTree earned $8.9 million on revenue of $111.4 million in 2002 as it benefited from record low interest rates that fueled demand for new and refinanced mortgages.
New York-based USA Interactive plans to issue 0.6199 of its shares for each LendingTree common and preferred share. At Friday’s prices, that was a 47.5 percent premium for LendingTree shareholders. The transaction is valued in a range of $626 million to $734 million, USAI said.
Shares of LendingTree soared $5.99, or 40.1 percent, to $20.68 in afternoon trading on the Nasdaq Stock Market. USAI shares lost $1, or 2.9 percent, to $33.85.
USA Interactive earned $1.9 billion on revenue of $4.6 billion in 2002. The earnings figure reflected a $2.4 billion one-time gain on the sale of entertainment assets to France’s Vivendi; its profit from continuing operations was $7.4 million in 2002.
USA Interactive claims a base of nearly 40 million monthly Internet users.
LendingTree says it has facilitated nearly $48 billion in closed loans. In addition to real estate loans, it can help customers get automobile, personal and debt consolidation loans.
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On the Net:
USA Interactive: www.usainteractive.com
LendingTree: www.lendingtree.com