The Story Behind OpenTable's Tangled Courtship of Priceline
Skift Take
Who asked who out? OpenTable kicked off the sale process and approached the Priceline Group about an acquisition via email in mid-April in a process that ultimately involved six other companies. The usual suspects likely expressed interest, and Priceline's initial non-binding bid was first and substantially higher than that of the other bidder.
OpenTable put itself up for sale in late March, and in the run-up to the Priceline Group's June 13 acquisition announcement, OpenTable attracted expressions of interest from six other companies -- including one that submitted two bids -- in addition to Priceline's.
So Priceline was initially the pursued rather than the pursuer, and it moved fast, submitting the first "non-binding expression of interest" at $95 to $105 per share in cash on May 9.
The $103 per share offer that the OpenTable board ultimately accepted June 12 -- just one day before the acquisition announcement -- bested a $92 offer from the other unnamed company and represented a 46% premium over the closing share price on June 12.
The facts surrounding OpenTable's sale process, which began March 25 when the board formed a special committee of CEO Matthew Roberts, chairman Thomas Layton, and board member Bill Gurley of Benchmark Capital to explore strategic alternatives, were detailed in an SEC filing June 25.
Although Priceline kicked off the serious bidding with the $95 to $105 non-binding offer May 9, which was just three weeks after OpenTable CEO Roberts emailed Priceline Group CEO Darren Huston to gauge whether Priceline "would be interested in exploring a potential acquisition," according to the filing, abundant interest by other suitors preceded and followed it.
A company identified as Party 4 submitted a non-binding expression of interest of $80 to $85 per share in cash on May 23, made what it characterized as a "final offer" of $85 per share on June 3, but upped it to $92 two days later.
Three days later, Party 4's financial advisor contacted OpenTable's financial advisor, Qatalyst Partners, to say the company might be willing to increase the offer to $95 per share.
The frenzy of discussions and negotiations proceeded to the point that at least three companies, including Priceline, Party 4, and Party 6, were granted access in mid-May to OpenTable's "electronic data room for the purpose of conducting due diligence," the SEC filing states.
Eight outside companies actually were involved in some way in the sale process, with seven initially expressing interest in discussing an OpenTable acquisition, and only one stating it wasn't interested, the SEC filing states.
OpenTable even received an unsolicited expression of interest from Party 7 on June 2 about a "potential transaction or combination," the SEC filing states.
But, OpenTable's special committee of Robe
