Ctrip Shares Jump On Priceline Investment

(RTTNews) - Priceline Group (PCLN) said Wednesday it will invest $500 million in Chinese online travel company Ctrip.com International Ltd (CTRP).

The online travel leader also said it will expand an existing commercial agreement with Ctrip to strengthen their global partnership.

Following the announcement, Ctrip shares gained 12.39% at $67.94 in after-hours trade on the Nasdaq.

Priceline's $500 million investment will be through a convertible bond and Ctrip has granted Priceline permission to acquire Ctrip shares in the open market over the next twelve months, so that combined with shares convertible under the bond, Priceline may hold up to 10% of Ctrip's outstanding shares.

Upon purchase of the convertible bond, Priceline will acquire the right to appoint an observer to the Ctrip board.

The expanded global partnership between Priceline and Ctrip will promote tourism to and from China by allowing Ctrip's customers to reach Priceline's global portfolio of over 500,000 accommodations outside of the Greater China region, and Priceline's customers to reach Ctrip's over 100,000 accommodations in the Greater China region.