Why Was Kayak Halted?

A temporary halt in trading had Kayak (NASDAQ:KYAK) shares paused until 4:30 p.m. eastern time on Thursday. The halt was implemented after Kayak announced that Priceline (NASDAQ:PCLN) had agreed to acquire the online discount travel booker for $1.8 billion, or $40 per share. The price represents a 29% premium to Kayak’s Thursday closing price.

Once trading had resumed, shares jumped 32 percent in after hours trading.

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As a result, shares of Expedia (NASDAQ:EXPE) fell 4.3 percent in after hours trading, as the integration of Priceline’s travel listings and bidding platform with Kayak’s search engine could hurt its market share. TripAdvisor (NASDAQ:TRIP) dropped as well, falling 3.3 percent; the deal could end its travel review partnership with Kayak.

The acquisition ends Kayak’s existence as an independent public company only a few months after making its initial public offering in late July. In the interim, shares have risen from its $26 I.P.O price to $31.04, the stock’s closing price on Thursday.

While the deal still hinges on regulatory approval, the boards of both companies have unanimously approved the transaction, which is expected to close by the end of the first quarter in 2013.

“Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers,” Jeffery H. Boyd, Priceline’s chief executive, said in a statement.

Along with the purchase, Kayak reported third-quarter earnings on Thursday; for the three month period posted revenue of $78.6 billion, beating analysts forecast of $77.36 billion.

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