USA shops for Travel
Diller in buying mood, to nab U.K. TV group
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Company will pay $100 million in cash and stock for TV Travel, which owns channels in the U.K. and Germany. USA already operates one Teutonic travel net in partnership with troubled media group Kirch, fueling speculation the two nets could merge and Diller become a player in a nation where the TV landscape is being redrawn.
John Malone's Liberty Media, a big USA shareholder, is active in U.K. and European cable, but recently failed in a bid to buy Deutsche Telekom's cable systems.
Diller's USA Networks is about to split in two, with the entertainment assets being folded into Vivendi Universal. A pared-down, renamed USA Interactive remains a publicly traded Diller-owned company focused on Internet and interactive assets -- and it's flush with cash.
Big plans
"Barry is going to buy up the world," said one fund manager. Travelocity.com and even giant Amazon.com have been rumored targets. With most Internet stocks still ailing, Diller has a world of choice.
Travel is a key component of USA's overall strategy of acquiring and growing companies that offer goods and services via TV or the Internet. USA owns controlling interests in Expedia and Hotel Reservations Network, and it plans to launch a cable travel network in the USA. TV Travel Shop's management team, led by Stephen Welton, will remain in place and oversee USA's new domestic travel channel.
Other holdings
USA Interactive's other holdings include Home Shopping Network and Ticketmaster.
The USA/Kirch venture, Sonnenklar, and TV Travel Shop have yet to break even, but both have said they plan to double revenue this year.
Sonnenklar's revenue was €27 million ($24 million) last year, and TV Travel Shop's was an estimated $9 million. Its gross transaction value was $240 million for the fiscal year ended in September.
