Expedia to Spin Off TripAdvisor in Q3

Includes: EXPE, IAC
by: TechCrunch

By Leena Rao

Travel search and booking giant Expedia (NASDAQ:EXPE) is spinning off trip reviews site TripAdvisor as a public company. In a release, Expedia said that its Board of Directors has preliminarily approved the plan to separate Expedia into two publicly traded companies.

Expedia/IAC (IACI) must feel that spinning off TripAdvisor as a public company could be a financially lucrative move. TripAdvisor, which was founded in 2000, was originally bought by IAC for $212 million in 2004. IAC spun off Expedia, which included TripAdvisor, in 2005. The newly formed TripAdvisor would include all of the domestic and international operations, including its flagship site and 18 other travel media and advertising brands.

According to the release: It is anticipated that the transaction will take the form of a distribution of stock of TripAdvisor to Expedia stockholders or a reclassification of Expedia stock, with the holders of Expedia stock receiving a proportionate amount of TripAdvisor stock, in either case in a tax free transaction. It is expected that Expedia’s dual-class equity capital structure and the governance arrangements between Barry Diller and Liberty Media will be mirrored at TripAdvisor following the transaction.

The transaction is still subject to final approval by Expedia’s Board of Directors and the company says that it will probably seek stockholder approval of the transaction. The proposed spin-off is expected to be completed in the third quarter of 2011.

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