Dallas, Texas 09/12/2014 (FINANCIALSTRENDS) – Priceline Group Inc (NASDAQ:PCLN) is the thick of competitive shenanigans, as it was recently downgraded by analyst Evercore, citing the competition.
Priceline Group Inc (NASDAQ:PCLN) has been downgraded from Overweight rating and its price target too lowered to $1,350 from its previous $1,450 price target offer. Thus far, the team has upgraded Priceline Group competitor Tripadvisor (NASDAQ:TRIP) to Equal-weight. The price target too had been revised to $110 from its previous $85 tag.
Priceline Group Inc (NASDAQ:PCLN) has been reworking its capital flow by way of offering lucrative notes. In a press release on August 15, the company had offered $1 billion notes as private offering. These notes are to pay an interest at the rate of 0.90% each year. It has been expecting its offer to raise funds to the tune of $990 million after fees and expenses are deducted. In the announcement the company had proposed that it will use some of the funds towards stock buy backs. As the share range in around $1,300, the convertible senior notes will be due in 2021. It also has benefits for the initial buyers with an $150 million overallotment option for the initial buyers.
Earlier in August this year, Priceline had declared its intention to expand, with an increase in its stake in Ctrip. The company’s $500 million investment in the China-based online travel leader by way of convertible bonds will be effective over a 12 month period. Priceline has already secured the regulatory permissions to increase and hold stake in Ctrip.
Incidentally the benefits are mutual for Ctrip and Priceline.
Ctrip will provide the car rental services owned by Priceline a fillip, while the former will gain from Priceline’s 500k accommodations available outside of China.
As Priceline beefs its presence through the current deal, the pressure does play up on competing peers such as Expedia-backed eLong, besides Baidu-backed Qunar online services.