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Priceline Buying OpenTable and More Industry News

Priceline Buying OpenTable and More Industry News


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A roundup of this week’s food industry financial news

Priceline, the online travel booking website, is buying OpenTable for $2.6 billion.

This week in industry news, Priceline is buying OpenTable for $2.6 billion, Luby’s profit fell 29.7 percent in the third quarter, and Panera Bread secures a $100 million loan.

Read on for more of this week's biggest financial news in the world of food.

Earnings

Luby's Inc.: The company’s profit fell 29.7 percent in the third quarter.

McDonald’s Corp.: For May, McDonald’s global same-store sales rose 0.9 percent.

Mergers/Acquisitions

Open Table: Priceline is buying OpenTable for $2.6 billion.

P.F. Chang's China Bistro Inc.: The company agreed to a $1 billion acquisition by Centerbridge Partners, L.P.

More Financial News

POM Wonderful, L.L.C. vs Coca-Cola Co.: The Supreme Court ruled in favor of POM Juice after POM Juice sued Coca-Cola claiming that Coca-Cola’s Minute Maid “Pomegranate Blueberry” drink contains very little pomegranate or blueberry juice.

Photo Credit: Flickr/Mike Mozart

Panera Bread Co.: The company secured a $100 million loan from Bank of America, Wells Fargo, and TD Bank for general corporate funds, including growth initiatives.

Have the inside scoop on a merger or acquisition? Know of a new advertising campaign around a new iconic product? We’re always looking to get ahead of the game, so email us your tips.

Haley Willard is The Daily Meal's assistant editor. Follow her on Twitter @haleywillrd.


Priceline buying OpenTable for $2.6 billion

NEW YORK (AP) -- Priceline is buying online restaurant reservation company OpenTable for $2.6 billion. The deal should help Priceline, the online travel company, branch out into a new business segment.

"Travelers are diners," said Priceline CEO and President Darren Huston, in a conference call. "It's the same customers. There's opportunity to cross promote brands."

Priceline will pay $103 per share, which is a 46 percent premium to OpenTable Inc.'s Thursday closing price of $70.43.

Shares of OpenTable soared $33.59, or 47.7 percent, to $104.02 — above the offered price — in morning trading Friday.

OpenTable seats more than 15 million diners per month at more than 31,000 restaurants. OpenTable allows users to make free reservations at restaurants through its website and mobile apps. It makes money by charging restaurants fees for the bookings. Users can also read reviews of the restaurants and view menus through the website.

The table reservations company will still be based in San Francisco and will operate as an independent business led by its current management team.

Huston said Priceline's first goal is to expand OpenTable internationally. Users can already book restaurants through OpenTable in London, Berlin, Hong Kong and other cities, but Huston said it wanted to bring it to more cities. Since Priceline already has "offices in every major city in the world," doing so should be seamless, he said.

OpenTable is also working on making it easier to sign up new restaurants to its service, said Huston. The company is working on creating a cloud-based system instead of using the hardware it currently needs restaurants to install to use OpenTable.

At Priceline, an average of more than 1 million guests stay in accommodations booked through one of brands each night. It has more than 480,000 properties in more than 200 countries and territories worldwide.

The Norwalk, Connecticut, company changed its name from Priceline.com Inc. to Priceline Group Inc. in April to better reflect its overall business. Its brands include Booking.com, priceline.com, agoda.com, KAYAK and rentalcars.com.

Both companies' boards unanimously approved the transaction, which is targeted to close in the third quarter.

Shares of Priceline rose $5.89 to $1,231.89 in morning trading.

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China crypto mining business hit by Beijing crackdown, bitcoin tumbles

SHANGHAI (Reuters) -Cryptocurrency miners, including HashCow and BTC.TOP, have halted all or part of their China operations after Beijing intensified a crackdown on bitcoin mining and trading, hammering digital currencies amid heightened global regulatory scrutiny. It was the first time China's cabinet has targeted virtual currency mining, a sizable business in the world's second-biggest economy that some estimates say accounts for as much as 70% of the global crypto supply. Cryptocurrency exchange Huobi on Monday suspended both crypto-mining and some trading services to new clients from mainland China, adding it will instead focus on overseas businesses.

First Warning Sign in Global Commodity Boom Flashes in China

(Bloomberg) -- One pillar of this year’s blistering commodities rally -- Chinese demand -- may be teetering.Beijing aced its economic recovery from the pandemic largely via an expansion in credit and a state-aided construction boom that sucked in raw materials from across the planet. Already the world’s biggest consumer, China spent $150 billion on crude oil, iron ore and copper ore alone in the first four months of 2021. Resurgent demand and rising prices mean that’s $36 billion more than the same period last year.With global commodities rising to record highs, Chinese government officials are trying to temper prices and reduce some of the speculative froth that’s driven markets. Wary of inflating asset bubbles, the People’s Bank of China has also been restricting the flow of money to the economy since last year, albeit gradually to avoid derailing growth. At the same time, funding for infrastructure projects has shown signs of slowing.Economic data for April suggest that both China’s economic expansion and its credit impulse -- new credit as a percentage of GDP -- may already have crested, putting the rally on a precarious footing. The most obvious impact of China’s deleveraging would fall on those metals keyed to real estate and infrastructure spending, from copper and aluminum, to steel and its main ingredient, iron ore.“Credit is a major driver for commodity prices, and we reckon prices peak when credit peaks,” said Alison Li, co-head of base metals research at Mysteel in Shanghai. “That refers to global credit, but Chinese credit accounts for a big part of it, especially when it comes to infrastructure and property investment.”But the impact of China’s credit pullback could ripple far and wide, threatening the rally in global oil prices and even China’s crop markets. And while tighter money supply hasn’t stopped many metals hitting eye-popping levels in recent weeks, some, like copper, are already seeing consumers shying away from higher prices.“The slowdown in credit will have a negative impact on China’s demand for commodities,” said Hao Zhou, senior emerging markets economist at Commerzbank AG. “So far, property and infrastructure investments haven’t shown an obvious deceleration. But they are likely to trend lower in the second half of this year.”A lag between the withdrawal of credit and stimulus from the economy and its impact on China’s raw material purchases may mean that markets haven’t yet peaked. However, its companies may eventually soften imports due to tighter credit conditions, which means the direction of the global commodity market will hinge on how much the recovery in economies including the U.S. and Europe can continue to drive prices higher.Some sectors have seen policy push an expansion in capacity, such as Beijing’s move to grow the country’s crude oil refining and copper smelting industries. Purchases of the materials needed for production in those sectors may continue to see gains although at a slower pace.One example of slowing purchases is likely to be in refined copper, said Mysteel’s Li. The premium paid for the metal at the port of Yangshan has already hit a four-year low in a sign of waning demand, and imports are likely to fall this year, she said.At the same time, the rally in copper prices probably still has a few months to run, according to a recent note from Citigroup Inc., citing the lag between peak credit and peak demand. From around $9,850 a ton now, the bank expects copper to reach $12,200 by September.It’s a dynamic that’s also playing out in ferrous metals markets.“We’re still at an early phase of tightening in terms of money reaching projects,” said Tomas Gutierrez, an analyst at Kallanish Commodities Ltd. “Iron ore demand reacts with a lag of several months to tightening. Steel demand is still around record highs on the back of the economic recovery and ongoing investments, but is likely to pull back slightly by the end of the year.”For agriculture, credit tightening may only affect China’s soaring crop imports around the margins, said Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultant Co. Less cash in the system could soften domestic prices by curbing speculation, which may in turn reduce the small proportion of imports handled by private firms, he said.The wider trend is for China’s state-owned giants to keep importing grains to cover the nation’s domestic shortfall, to replenish state reserves and to meet trade deal obligations with the U.S.No DisasterMore broadly, Beijing’s policy tightening doesn’t spell disaster for commodities bulls. For one, the authorities are unlikely to accelerate deleveraging from this point, according the latest comments from the State Council, China’s cabinet.“Internal guidance from our macro department is that the country won’t tighten credit too much -- they just won’t loosen further,” said Harry Jiang, head of trading and research at Yonggang Resouces, a commodity trader in Shanghai. “We don’t have many concerns over credit tightening.”And in any case, raw materials markets are no longer almost entirely in thrall to Chinese demand.“In the past, the inflection point of industrial metal prices often coincides with that of China’s credit cycle,” said Larry Hu, chief China economist at Macquarie Group Ltd. “But that doesn’t mean it will be like that this time too, because the U.S. has unleashed much larger stimulus than China, and its demand is very strong.”Hu also pointed to caution among China’s leaders, who probably don’t want to risk choking off their much-admired recovery by sharp swings in policy.“I expect China’s property investment will slow down, but not by too much,” he said. “Infrastructure investment hasn’t changed too much in the past few years, and won’t this year either.”Additionally, China has been pumping up consumer spending as a lever for growth, and isn’t as reliant on infrastructure and property investment as it used to be, said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong. The disruption to global commodities supply because of the pandemic is also a new factor that can support prices, he said.Other policy priorities, such as cutting steel production to make inroads on China’s climate pledges, or boosting the supply of energy products, whether domestically or via purchases from overseas, are other complicating factors when it comes to assessing import demand and prices for specific commodities, according to analysts.(Updates copper price in 11th paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

AdPlace A Bag On Your Car Mirror When Traveling

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Bitcoin, Ether Now Down 50% From Last Month’s ATHs as Rout Resumes

Even if Huobi is the specific catalyst for today's plunge, it's just the latest negative news in the sector that has been battered in the last few weeks.

Zara owner Inditex to close all stores in Venezuela, local partner says

Inditex, owner of brands including Zara, Bershka and Pull & Bear, will close all its stores in Venezuela in coming weeks as a deal between the retailer and its local partner Phoenix World Trade has come under review, a spokesperson for Phoenix World Trade said. Phoenix World Trade, a company based in Panama and controlled by Venezuelan businessman Camilo Ibrahim, took over operation of Inditex stores in the South American country in 2007. "Phoenix World Trade is re-evaluating the commercial presence of its franchised brands Zara, Bershka and Pull&Bear in Venezuela, to make it consistent with the new model of integration and digital transformation announced by Inditex," the company said in response to a Reuters request.

China Braces for $1.3 Trillion Maturity Wall as Defaults Surge

(Bloomberg) -- Even by the standards of a record-breaking global credit binge, China’s corporate bond tab stands out: $1.3 trillion of domestic debt payable in the next 12 months.That’s 30% more than what U.S. companies owe, 63% more than in all of Europe and enough money to buy Tesla Inc. twice over. What’s more, it’s all coming due at a time when Chinese borrowers are defaulting on onshore debt at an unprecedented pace.The combination has investors bracing for another turbulent stretch for the world’s second-largest credit market. It’s also underscoring the challenge for Chinese authorities as they work toward two conflicting goals: reducing moral hazard by allowing more defaults, and turning the domestic bond market into a more reliable source of long-term funding.While average corporate bond maturities have increased in the U.S., Europe and Japan in recent years, they’re getting shorter in China as defaults prompt investors to reduce risk. Domestic Chinese bonds issued in the first quarter had an average tenor of 3.02 years, down from 3.22 years for all of last year and on course for the shortest annual average since Fitch Ratings began compiling the data in 2016.“As credit risk increases, everyone wants to limit their exposure by investing in shorter maturities only,” said Iris Pang, chief economist for Greater China at ING Bank NV. “Issuers also want to sell shorter-dated bonds because as defaults rise, longer-dated bonds have even higher borrowing costs.”The move toward shorter maturities has coincided with a Chinese government campaign to instill more discipline in local credit markets, which have long been underpinned by implicit state guarantees. Investors are increasingly rethinking the widely held assumption that authorities will backstop big borrowers amid a string of missed payments by state-owned companies and a selloff in bonds issued by China Huarong Asset Management Co.The country’s onshore defaults have swelled from negligible levels in 2016 to exceed 100 billion yuan ($15.5 billion) for four straight years. That milestone was reached again last month, putting defaults on track for another record annual high.The resulting preference for shorter-dated bonds has exacerbated one of China’s structural challenges: a dearth of long-term institutional money. Even before authorities began allowing more defaults, short-term investments including banks’ wealth management products played an outsized role.Social security funds and insurance firms are the main providers of long-term funding in China, but their presence in the bond market is limited, said Wu Zhaoyin, chief strategist at AVIC Trust Co., a financial firm. “It’s difficult to sell long-dated bonds in China because there is a lack of long-term capital,” Wu said.Chinese authorities have been taking steps to attract long-term investors, including foreign pension funds and university endowments. The government has in recent years scrapped some investment quotas and dismantled foreign ownership limits for life insurers, brokerages and fund managers.But even if those efforts gain traction, it’s not clear Chinese companies will embrace longer maturities. Many prefer selling short-dated bonds because they lack long-term capital management plans, according to Shen Meng, director at Chanson & Co., a Beijing-based boutique investment bank. That applies even for state-owned enterprises, whose senior managers typically get reshuffled by the government every three to five years, Shen said.The upshot is that China’s domestic credit market faces a near constant cycle of refinancing and repayment risk, which threatens to exacerbate volatility as defaults rise. A similar dynamic is also playing out in the offshore market, where maturities total $167 billion over the next 12 months.For ING’s Pang, the cycle is unlikely to change anytime soon. “It may last for another decade in China,” she said.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Exclusive-HSBC CEO says Bitcoin not for us

HSBC has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency, its Chief Executive Noel Quinn told Reuters. Europe's biggest bank's stance on cryptocurrencies comes as the world's biggest and best-known, Bitcoin, has tumbled nearly 50% from the year's high, after China cracked down on mining the currency and prominent advocate Elon Musk tempered his support. HSBC's stance also contrasts with rival banks such as Goldman Sachs, which Reuters in March reported had restarted its cryptocurrency trading desk.

Bubble Risks Test China’s Commitment to No Sharp Turn in Policy

(Bloomberg) -- Despite Beijing’s best efforts, asset bubbles are forming in China.Home prices are soaring, prompting officials to revive the idea of a national property tax. A surge in raw material prices spurred pledges to increase domestic supply, toughen market oversight, and crack down on speculation and hoarding.The rapid gains are challenging the central bank’s ability to restrain inflation without hiking borrowing costs or making a sharp turn in monetary policy -- something the People’s Bank of China has said it will avoid. The risk is the government’s attempts to curb price increases won’t be enough, forcing the central bank’s hand at a vulnerable time for domestic consumption.That would be a shock to the nation’s financial markets, which are pricing in a relatively benign scenario. The 10-year government bond yield has fallen to the lowest level in eight months, while the stock benchmark CSI 300 Index is the least volatile since January. The calm contrasts with the rest of the world, where investors are becoming increasingly obsessed with how central banks may react to the threat of an overheating global economy.“How to mitigate the boom in property and commodities without tightening macro policy -- it’s a real challenge for the Chinese government,” said Zhou Hao, an economist at Commerzbank AG in Singapore.More than 15 months after the pandemic first forced China to cut rates and inject trillions of yuan into the financial system, policy makers in Beijing are -- like many others across the world -- dealing with the aftermath. As the global economic recovery accelerates, some are being forced to act because of inflation: Brazil in March became the first Group of 20 nation to lift borrowing costs, with Turkey and Russia following suit. Even Iceland hiked a short-term rate in May.Others, like the Federal Reserve and the European Central Bank, have insisted spikes in prices are only temporary. The PBOC also downplayed inflation worries in its first-quarter monetary report, published shortly after data showed factory prices surged 6.8% in April -- the fastest pace since 2017.What Bloomberg Economists Say. “It will be a challenge for China to contain rising producer prices because few commodities are priced within the country. There’s not much China can do, and even tightening monetary policy will not be able to change the situation,” said David Qu, China economist at Bloomberg Economics.-- Bloomberg Terminal subscribers can access more insight HEREWhile the rapid increase in commodity prices moderated in recent days, a continuation of gains could pressure companies to pass on rising costs to consumers, who are already spending less than expected. Analysts at Huachuang Securities Co. said in a May 9 report that prices of consumer goods, like home appliances and furniture, as well as electric vehicles and food, are rising. Still, there’s little evidence of demand-driven pressures, with core inflation, which strips out volatile food and energy costs, fairly subdued.The threat of inflation -- coupled with a fragile economy -- tends to be bad news for stocks because of how it erodes corporate profits, and for bonds it reduces the value of future cash flows. Accelerating prices walloped China’s bond market in 2019, and contributed to a steep selloff in stocks in early 2016.In a sign of how seriously that threat is being taken, China’s cabinet said Wednesday more effort needs to be taken to tackle rising commodity prices. A PBOC official said China should allow the yuan to appreciate to offset the impact of rising import prices, according to an article published Friday. The currency is trading near an almost three-year high against the dollar.Imported inflation is a headache for China’s leaders already dealing with risks caused by a surge in capital inflows. In recent years Beijing opened investment channels to allow more funds into its financial system. The goal was to use foreign institutions’ heft to anchor its markets and stabilize its currency, but the record liquidity unleashed by global central banks in the wake of the pandemic is now pressuring prices in China.That’s prompted some strong language from senior officials. Top securities regulator Yi Huiman said in March large flows of “hot money” into China must be strictly controlled. The same month, banking regulator Guo Shuqing said he was “very worried” that asset bubbles in overseas markets would burst soon, posing a risk to the global economy.Deciding whether recent spikes in prices are temporary or a permanent shift toward sustained inflation is something Chinese policy makers have to grapple with. For now, Beijing’s current approach of jawboning, boosting supply and penalizing speculation appears to be targeted at the former.“It’s still too early to tell if China can contain the surge in producer prices, and if it can’t, whether that will have large-scale impact on consumer prices,” said Raymond Yeung, chief economist for Greater China at Australia and New Zealand Banking Group Ltd. “This inflation is largely imported -- it’s not something that can be solved by the PBOC.”More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Hong Kong Exchange’s New CEO Is Put on Cleanup Duty

(Bloomberg) -- The veteran JPMorgan Chase & Co. banker who’s taking the helm at Hong Kong’s exchange has been put on cleanup duty.Chairman Laura Cha has handed Nicolas Aguzin, who takes charge Monday, the task of reviewing the exchange’s practices after a bribery scandal and censure from the regulator, according to people familiar with the matter. The 52-year-old former head of JPMorgan’s international private bank is seen by Cha as having the experience to force a cultural shake-up given his background at a heavily regulated bank, said the people, asking to remain anonymous discussing sensitive issues.Aguzin takes over as the bourse is delivering record earnings. His predecessor, Charles Li, oversaw a doubling of revenue during his decade in charge through acquisitions, loosened listing rules and, most importantly, trading links with mainland China. The easier oversight allowed the listing of Chinese technology giants such as Alibaba Group Holding Ltd. and positioned it as the exchange-of-choice for mainland firms amid tensions with the U.S.But there has also been criticism that investor protections were sacrificed to win business. Over the past years, there has been a steady stream of flareups between the bourse and the regulator over IPO quality, the proliferation of shell companies and whether to allow dual class shares.“The HKEX has done a great job in market development, and has introduced measures to improve investor protection,” Sally Wong, CEO of Hong Kong Investment Funds Association, said in an email. “But it seems that issuers’ voices tend to prevail over that of the investors. We very much look forward to working with the new CEO to see how to strike a more appropriate balance to better safeguard investor interests.”Spokespeople for the exchange and the Securities and Futures Commission as well as Aguzin declined to comment.In a review released last year after the former IPO vetting co-head was arrested for bribery, the SFC discovered “numerous ambiguities” in the Chinese Wall between its listing and business divisions. Other issues highlighted last year include keeping track of share options and following up on complaints on withdrawn IPO applications.Cha had begun to tighten internal checks and balances for senior managers toward the end of Li’s tenure as well as assert more board control over hiring, people familiar have said. The exchange has halted the interactions between its listing and business units, according to the SFC review. Last week, in a joint statement with the SFC, the bourse vowed to better police its frothy IPO market, citing concerns about companies inflating their values, market manipulation and unusually high underwriting fees.Aguzin is expected by the board to prioritize the exchange’s role as a regulator alongside its growth ambitions, people familiar said.David Webb, a former HKEX director, investor and corporate governance activist, is skeptical the bourse will institute any meaningful reforms. “HKEX has, with government approval, lowered its standards to attract business, for example, by listing second-class shares with weak voting rights,” he said in an email. “It shows no sign of raising them again.”Investors have also urged the exchange to set rules requiring company boards to have a lead outside board member or an independent chair, according to Wong. “But it seems that the HKEX is not ready to even bring them up for market consultation.”The government is on board with Aguzin’s appointment, which comes at a fraught time after Beijing has tightened its grip on the city, raising questions about its continued status as an international financial hub.Secretary for Financial Services and the Treasury Christopher Hui said the three-tiered regulatory system comprising his department, the SFC and HKEX has worked well. Aguzin’s appointment embodies the city’s openness and its role as a gateway between China and the world, he said. “This is exactly what we will pursue.”Further deepening connections to China is seen as key to growth for the bourse, which also faces stiffer competition from mainland exchanges as China opens its financial markets.While Aguzin has worked in Asia for the past decade -- also serving as JPMorgan’s CEO of Asia Pacific from 2013 to 2020 -- he will be the first non-Chinese CEO of a bourse that often needs to deal with Beijing.Cha is well connected in China, having served as vice chairman of China Securities Regulatory Commission. She has signaled that she sees the bourse’s role as serving Beijing’s interests and avoiding competition with the mainland, a person said familiar with the matter said last year.The push toward the mainland is not all welcome in China. Expanding the link to include several benchmark stocks has proved difficult, with one sticking point being whether to include shares like Alibaba Group, which are dual listed and with weighted voting rights.Even so, Cha said at the time of the appointment that Aguzin’s remit will include further strengthening the link to the mainland.Another board member, Fred Hu, said in an interview that “Aguzin is well positioned to take HKEX into the future, to further deepen the connectivity with China but also connectivity with the rest of the world.”More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

NZD/USD Forex Technical Analysis – Trading on Weakside of Main 50% Level at .7204

The price action the last few days suggests the direction of the NZD/USD will be determined by trader reaction to the main 50% level at .7204.

Bitcoin down almost 50% from year's high

Bitcoin fell to $32,601 at 1800 GMT (2 p.m. ET), losing $4,899.54 from its previous close. Bitcoin markets operate 24/7, setting the stage for price swings at unpredictable hours. "Many point to bitcoin's volatility as untenable," wrote RBC Capital Markets' Amy Wu Silverman in a research note published on Saturday.

Dollar stuck near 3-month lows, bitcoin struggles

The dollar was pinned near three-month lows against a basket of major currencies on Monday, as bets on a robust global economic recovery continued to support currencies seen as riskier. The greenback, seen as a safe haven trade, has steadily retreated over the past two months as optimism has built about the global economic outlook. Currency analysts were already looking ahead to key U.S. personal consumption and inflation figures due Friday for any warning signs that U.S. inflation could be gathering pace and putting pressure on the Federal Reserve to taper policy.

Commerce Secretary tells how to fix the crazy car shortage

So we have auto shortages and billions of dollars of car sales lost, prices gone bananas for used cars and thousands of jobs at risk. What the hell happened? Well COVID yes, but executives made some bad calls too. That plus over-dependence on a fragile and non-U.S.-based supply chain.

Ex-Trump Official at Binance.US Faces Uproar Over Firm’s Sibling

(Bloomberg) -- The first challenge for the new chief executive officer of Binance.US: combat the perception that his company is simply a stand-in for a sister crypto firm that’s under investigation by U.S. authorities.Brian Brooks, a controversial former banking regulator under President Donald Trump, is embarking on a campaign to reassure regulators and others that his company is focused on complying with regulations and is independent from its namesake, Binance Holdings Ltd. The world’s largest cryptocurrency exchange, Binance Holdings is under investigation by the Justice Department and the Internal Revenue Service, among other U.S. enforcers, Bloomberg News has reported.U.S. officials have long been concerned that criminals are using crypto exchanges to conceal illicit transactions, and that customers on those platforms are evading taxes on their trading profits.San Francisco-based Binance.US, which is small but one of the country’s fastest-growing cryptocurrency exchanges, is under attack by rivals who are all too eager to link the U.S. company to its embattled namesake. A study by blockchain analysis company Chainalysis Inc. concluded that Binance Holdings handled more transactions tied to illicit finance than any other exchange.“The challenge ahead of me is to get in front of the regulators and explain to them that we have an approach. It’s a heavily compliance-focused approach,” Brooks said in an interview. He’s planning in coming months to meet with the Commodity Futures Trading Commission and Securities and Exchange Commission, among other regulators. “We are not an alter-ego of Binance,” said Brooks, who most recently served as acting head of the Office of the Comptroller of the Currency at the Treasury Department.He generated controversy during his tenure at the OCC over a rule that would have prohibited banks from withholding loans to industries like gun makers. He finalized the measure on his last day, a move that drew plaudits from Republicans and opposition from Democrats, consumer groups and banks. The Biden administration quickly stopped the new rule from taking effect.To continue its exponential growth, Binance.US will need to ensure that U.S. regulators don’t restrict it because of issues with Binance Holdings. A separate company, the U.S. firm is permitted to do business in 43 states, the largest exceptions being New York and Texas. In addition to securing those remaining licenses, Binance.US executives hope to one day persuade regulators to allow crypto-tied derivatives in the U.S., the business line that turned Binance Holdings into the behemoth it is today. All of those goals could become more difficult if regulators crack down.Though Brooks says Binance.US and Binance Holdings work at arm’s length, Binance.US’s majority shareholder is Changpeng Zhao, who founded Binance Holdings in China in 2017. The son of Chinese educators who emigrated to Canada, he got his start as an intern in Japan writing software for trading platforms.A spokeswoman for Binance Holdings said the company takes its legal obligations seriously but doesn’t comment on specific matters or inquiries.Zhao has said Binance Holdings is working with regulators around the world and continues to improve its compliance.Binance Holdings allows investors to trade cryptocurrencies that aren’t available on other exchanges. It also allows trading of derivatives, which investors can use to magnify their bets with leverage. Those features help explain why trading volume on Binance Holdings’ main exchange has quickly surpassed that of its rivals, like San Francisco-based Coinbase Global Inc.Binance Holdings processed more than $50 billion in crypto trading in the 24 hours ending at 2 p.m. ET on Friday, compared to more than $8.8 billion for Coinbase, according to Coinmarketcap.com, an industry website.Binance Holdings also processed more than $95 billion in derivatives, which investors outside the U.S. can use. Many exchanges, including Coinbase, don’t offer derivatives because they’re not approved to do so by U.S. regulators.By comparison, Binance.US handled about $1.9 billion in cryptocurrency transactions during that period, according to Coinmarketcap.com.Brooks said that Binance.US operates independently of Binance.com, which is Binance Holdings’ exchange, and that the U.S.-based exchange merely licenses the Binance name and some of its technology for a fee.Coinbase’s ProtestBinance.US’s attempts to keep its image intact in Washington, which precede Brooks, have already come under attack.Last year, its chief U.S. rival, Coinbase, quit industry trade group Blockchain Association in protest after Binance.US was allowed to join. A Coinbase executive wrote in a resignation letter that “recent weeks have demonstrated to us that the Blockchain Association is not interested in the membership criteria we had worked to establish to underpin the mission of this organization.”Before its $86 billion public stock listing, Coinbase said in a filing with the SEC that it competes with companies that “have varying degrees of regulatory adherence, such as Binance.”Brooks, who before becoming the acting head of the OCC was Coinbase’s chief legal officer, said he was concerned about rivals casting aspersions on Binance.US.“I wish that weren’t the way the world worked. It obviously is,” Brooks said. He said Binance.US plans to soon triple the number of employees in its regulatory, legal and compliance teams and that the company has joined several trade associations to help press the crypto industry’s interests with regulators.Other exchanges have faced their own regulatory issues. The CFTC fined Coinbase $6.5 million in March for giving investors misleading information about its exchange’s trading volume.Last month, Coinbase and three other companies started a new trade association, called the Crypto Council for Innovation. Many cryptocurrency executives see it as a rival to the Blockchain Association, which Coinbase viewed as being tainted by Binance’s membership. A CCI representative said the group’s formation was unrelated to the disagreement with the Blockchain Association.Questions about the relationship between Binance Holdings and Binance.US aren’t limited to lobbying circles. Lawmakers and some regulators ask about Binance in meetings and seem confused about Binance Holdings’ involvement in the U.S. business, which country’s regulators watch over it and even where Binance Holdings is headquartered, according to two lobbyists for cryptocurrency firms. A Binance.US spokeswoman said the company hasn’t run into such confusion itself.Nomadic ExistenceZhao has adopted a nomadic existence for himself and his company. When the Chinese government cracked down on cryptocurrency exchanges, Binance Holdings moved its operations and has claimed a presence in Japan, Malta and Singapore, among other locations.Last year, Zhao disavowed that the company had a home base at all, saying that the headquarters was wherever he happened to be. In legal filings, the company’s lawyers say that it’s incorporated in the Cayman Islands, which is well-known for being an offshore tax and regulatory haven.Initially, U.S.-based investors could have accounts on Binance.com even though some of the exchange’s practices were prohibited in the U.S. In 2019, Binance limited access for U.S. investors, and said it had entered into a partnership with BAM Trading Services Inc., a Delaware corporation, to launch Binance.US.BAM was incorporated in February 2019, according to public filings, and initially listed Zhao as its sole director. Now the filings show three directors: Zhao, Binance Holdings’ Chief Financial Officer Wei Zhou and former BAM CEO Catherine Coley. A spokeswoman for Binance.US said that’s no longer the current composition of the board but declined to say how it has changed.Brooks said Zhao recruited him to the job and gave him complete management control. He said he and Zhao have a good rapport and that BAM plans to bring in more investors and expand its board.“I wasn’t going to come here and lend a credential for a company that’s really managed somewhere else,” said Brooks.Zhao worked at Bloomberg LP, the parent company of Bloomberg News, from 2002 to 2005 in a division that develops trading technology and analytics.Despite their fast growth, neither Binance.US nor Binance Holdings has built a large Washington presence, in contrast to some of their competitors.Binance Holdings recently tapped former Senator Max Baucus, a Montana Democrat, for policy advice and to connect the company with regulators and lawmakers. Neither Binance Holdings nor its U.S. counterpart have any registered lobbyists. Coinbase, by comparison, had two firms with nine lobbyists representing it as of last quarter.Brooks said he hasn’t decided whether Binance.US will hire its own lobbyists but will handle much of the outreach to lawmakers and regulators himself with other Binance.US executives.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Inside the Race to Avert Disaster at China’s Biggest ‘Bad Bank’

(Bloomberg) -- It was past 9 p.m. on Financial Street in Beijing by the time the figure inside Huarong Tower there picked up an inkbrush and, with practiced strokes, began to set characters to paper.Another trying workday was ending for Wang Zhanfeng, corporate chairman, Chinese Communist Party functionary—and, less happily, replacement for a man who very recently had been executed.On this April night, Wang was spotted unwinding as he often does in his office: practicing the art of Chinese calligraphy, a form that expresses the beauty of classical characters and, it is said, the nature of the person who writes them.Its mastery requires patience, resolve, skill, calm—and Wang, 54, needs all that and more. Because here on Financial Street, a brisk walk from the hulking headquarters of the People’s Bank of China, a dark drama is playing out behind the mirrored façade of Huarong Tower. How it unfolds will test China’s vast, debt-ridden financial system, the technocrats working to fix it, and the foreign banks and investors caught in the middle.Welcome to the headquarters of China Huarong Asset Management Co., the troubled state-owned ‘bad bank’ that has set teeth on edge around the financial world.For months now Wang and others have been trying to clean up the mess here at Huarong, an institution that sits—quite literally—at the center of China’s financial power structure. To the south is the central bank, steward of the world’s second-largest economy to the southwest, the Ministry of Finance, Huarong’s principal shareholder less than 300 meters to the west, the China Banking and Insurance Regulatory Commission, entrusted with safeguarding the financial system and, of late, ensuring Huarong has a funding backstop from state-owned banks until at least August.The patch though doesn’t settle the question of how Huarong makes good on some $41 billion borrowed on the bond markets, most incurred under Wang’s predecessor before he was ensnared in a sweeping crackdown on corruption. That long-time executive, Lai Xiaomin, was put to death in January—his formal presence expunged from Huarong right down to the signature on its stock certificates.The bigger issue is what all this might portend for the nation’s financial system and efforts by China’s leader, Xi Jinping, to centralize control, rein in years of risky borrowing and set the nation’s financial house in order.“They’re damned if they do and damned if they don’t,” said Michael Pettis, a Beijing-based professor of finance at Peking University and author of Avoiding the Fall: China’s Economic Restructuring. Bailing out Huarong would reinforce the behavior of investors who ignore risk, he said, while a default endangers financial stability if a “chaotic” repricing of the bond market ensues.Just what is going on inside Huarong Tower? Given the stakes, few are willing to discuss that question publicly. But interviews with people who work there, as well as at various Chinese regulators, provide a glimpse into the eye of this storm.Huarong, simply put, has been in full crisis mode ever since it delayed its 2020 earnings results, eroding investor confidence. Executives have come to expect to be summoned by government authorities at a moment’s notice whenever market sentiment sours and the price of Huarong debt sinks anew. Wang and his team must provide weekly written updates on Huarong’s operations and liquidity. They have turned to state-owned banks, pleading for support, and reached out to bond traders to try to calm nerves, with little lasting success.In public statements, Huarong has insisted repeatedly that its position is ultimately sound and that it will honor its obligations. Banking regulators have had to sign off on the wording of those statements—another sign of how serious the situation is considered and, ultimately, who’s in charge.Then there are regular audiences with the finance ministry and the other powerful financial bureaucracies nearby. Among items usually on the agenda: possible plans to hive off various Huarong businesses.Huarong executives are often kept waiting and, people familiar with the meetings say, tend to gain only limited access to top officials at the CBIRC, the banking overseer.The country’s apex financial watchdog—chaired by Liu He, Xi’s right-hand man in overseeing the economy and financial system—has asked for briefings on the Huarong situation and coordinated meetings between regulators, according to regulatory officials. But it has yet to communicate to them a long-term solution, including whether to impose losses on bondholders, the officials said.Representatives at the People’s Bank of China, the CBIRC, Huarong and the Ministry of Finance didn’t respond to requests for comment.Focus on BasicsA mid-level party functionary with a PhD in finance from China’s reputed Southwestern University of Finance and Economics, Wang arrived at Huarong Tower in early 2018, just as the corruption scandal was consuming the giant asset management company. He is regarded inside Huarong as low-key and down-to-earth, particularly in comparison to the company’s previous leader, Lai, a man once known as the God of Wealth.Hundreds of Huarong staff, from Beijing division chiefs to branch employees in faraway outposts, listened in on April 16 as Wang reviewed the quarterly numbers. He stressed that the company’s fundamentals had improved since he took over, a view shared by some analysts though insufficient to pacify investors. But he had little to say about what is on so many minds: plans to restructure and shore up the giant company, which he’d pledged to clean up within three years of taking over.His main message to the troops: focus on the basics, like collecting on iffy assets and improving risk management. The employees were silent. No one asked a question.One employee characterized the mood in his area as business as usual. Another said co-workers at a Huarong subsidiary were worried the company might not be able to pay their salaries. There’s a widening gulf between the old guard and new, said a third staffer. Those who outlasted Lai and have seen their compensation cut year after year have little confidence in the turnaround, while new joiners are more hopeful about the opportunities the change of direction offers.Others joke that Huarong Tower must suffer from bad feng shui: after Lai was arrested, a bank that had a branch in the building had to be bailed out to the tune of $14 billion.Dark humor aside, a rough consensus has begun to emerge among senior management and mid-level regulators: like other key state-owned enterprises, Huarong still appears to be considered too big to fail. Many have come away with the impression—and it is that, an impression—that for now, at least, the Chinese government will stand behind Huarong.At the very least, these people say, no serious financial tumult, such as a default by Huarong, is likely to be permitted while the Chinese Communist Party is planning a nationwide spectacle to celebrate the 100th anniversary of its founding on July 1. Those festivities will give Xi—who has been positioning to stay in power indefinitely—an opportunity to cement his place among China’s most powerful leaders including Mao Zedong and Deng Xiaoping.Huarong is “nowhere near” defaulting, the managing editor of Caixin Media wrote in an opinion piece on Saturday. Neither the Ministry of Finance nor Chinese regulators would allow it, Ling Huawei wrote.What will come after that patriotic outpouring on July 1 is uncertain, even to many inside Huarong Tower. Liu He, China’s vice premier and chair of the powerful Financial Stability and Development Committee, appears in no hurry to force a difficult solution. Silence from Beijing has started to rattle local debt investors, who until about a week ago had seemed unmoved by the sell-off in Huarong’s offshore bonds.Competing InterestsHuarong’s role in absorbing and disposing of lenders’ soured debt is worth preserving to support the banking sector cleanup, but requires government intervention, according to Dinny McMahon, an economic analyst for Beijing-based consultancy Trivium China and author of China’s Great Wall of Debt.“We anticipate that foreign bondholders will be required to take a haircut, but it will be relatively small,” he said. “It will be designed to signal that investors should not assume government backing translates into carte blanche support.”For now, in the absence of direct orders from the top, Huarong has been caught in the middle of the competing interests among various state-owned enterprises and government bureaucracies.China Investment Corp., the $1 trillion sovereign fund, for instance, has turned down the idea of taking a controlling stake from the finance ministry. CIC officials have argued they don’t have the bandwidth or capability to fix Huarong’s problems, according to people familiar with the matter.The People’s Bank of China, meantime, is still trying to decide whether to proceed with a proposal that would see it assume more than 100 billion yuan ($15.5 billion) of bad assets from Huarong, those people said.And the Ministry of Finance, which owns 57% of Huarong on behalf of the Chinese government, hasn’t committed to recapitalizing the company, though it hasn’t ruled it out, either, one person said.CIC didn’t respond to requests for comment.The banking regulator has bought Huarong some time, brokering an agreement with state-owned lenders including Industrial & Commercial Bank of China Ltd. that would cover any funding needed to repay the equivalent of $2.5 billion coming due by the end of August. By then, the company aims to have completed its 2020 financial statements after spooking investors by missing deadlines in March and April.“How China deals with Huarong will have wide ramifications on global investors’ perception of and confidence in Chinese SOEs,” said Wu Qiong, a Hong Kong-based executive director at BOC International Holdings. “Should any defaults trigger a reassessment of the level of government support assumed in rating SOE credits, it would have deep repercussions for the offshore market.”The announcement of a new addition to Wang’s team underscores the stakes and, to some insiders, provides a measure of hope. Liang Qiang is a standing member of the All-China Financial Youth Federation, widely seen as a pipeline to groom future leaders for financial SOEs. Liang, who arrived at Huarong last week and will soon take on the role of president, has worked for the three other big state asset managers that were established, like Huarong, to help clean up bad debts at the nation’s banks. Some speculate this points to a wider plan: that Huarong might be used as a blueprint for how authorities approach these other sprawling, debt-ridden institutions.Meantime, inside Huarong Tower, a key item remains fixed in the busy schedules of top executives and rank-and-file employees alike. It is a monthly meeting, the topic of which is considered vital to Huarong’s rebirth: studying the doctrines of the Chinese Communist Party and speeches of President Xi Jinping. (Updates to mention Caixin managing editor’s opinion piece on the matter. )More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Is Buying Bitcoin Right Now a Smart Idea?

It’s no longer news that Bitcoin’s dramatic fall on Thursday weighed on market sentiments relatively but Willy Woo a top crypto analyst, still believes the curtain call for Bitcoin’s overall upward rally has not occurred yet.

Renault-Nissan fights court battle with Indian workers on operations during COVID-19 surge

Renault-Nissan has told an Indian court it needs to continue production at its car plant to meet orders, rejecting claims from an employee union that COVID-19 safety protocols were being ignored at the factory, legal filings show. Renault-Nissan India and workers at its plant in the southern state of Tamil Nadu have been locked in a legal tussle after workers petitioned a court to halt operations because social distancing norms were being flouted and company-provided health benefits were outweighed by the risk to their lives. In response, Renault-Nissan has argued in a court filing - which is not public - that there was a "compelling need" to continue operations to fulfil domestic and export orders.

ɺ hot market': Demand for office maintenance workers growing at rapid clip

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Press Release

SAN FRANCISCO , July 16, 2015 /PRNewswire/ -- OpenTable , the world's leading provider of online restaurant reservations and part of The Priceline Group (NASDAQ: PCLN), today released the results of its "Technology and Dining Out" research survey, which provides insight into what diners want from technology before, during and after the dining experience.

The study explores everything from whether googling diners before they arrive is creepy or cool to what diners think of emerging in-meal technologies like on-table touchscreens and mobile payments.

"At OpenTable we sit right at the intersection of food and tech, which makes us infinitely curious about what people want from technology when they dine out," said

, OpenTable's VP of Restaurant & Product Marketing and author of the new e-Book, Technology and Dining Out 2015. "Dining out, like virtually every area of life, has been transformed by technology, but in an industry in which hospitality is paramount it's important to strike the right balance for your restaurant concept."

The survey of more than 6,000 diners across the United States concentrated in ten metro areas, including Atlanta , Boston , Chicago , Dallas , Denver , Minneapolis , New York , San Diego , San Francisco and Seattle . The respondents were aged 18 or over and had made at least one reservation on OpenTable in the past 12 months. Insights from the survey include:

    The menu matters: 86 percent of diners regularly check out menus online before dining out.

    Fine dining versus casual dining etiquette: 63 percent of diners eating out at a fine dining restaurant say they "rarely or never" use their phone during the meal, as compared to 35 percent of diners at a full-service casual restaurant.

    Post-meal tech use: 18 percent of diners routinely interact with a restaurant's loyalty program using technology.

The survey also revealed that Americans embrace technology and dining very differently depending on their location, with some cities interacting with and embracing technology more than others.

Restaurateurs who are interested in learning more can download the entire OpenTable Technology and Dining Out 2015 study and e-Book for free and discover further insights and perspective on Open for Business, the OpenTable blog providing tips, resources and fresh ideas for running a successful restaurant.

About OpenTable :
OpenTable , part of The Priceline Group (NASDAQ: PCLN), is the world's leading provider of online restaurant reservations, seating more than 16 million diners per month via online bookings across more than 32,000 restaurants. The OpenTable network connects restaurants and diners, helping diners discover and book the perfect table and helping restaurants deliver personalized hospitality to keep guests coming back. The OpenTable service enables diners to see which restaurants have available tables, select a restaurant based on verified diner reviews, menus, and other helpful information, and easily book a reservation. In addition to the company's website and mobile apps, OpenTable powers online reservations for nearly 600 partners, including many of the Internet's most popular global and local brands. For restaurants, the OpenTable hospitality solutions enable them to manage their reservation book, streamline their operations, and enhance their service levels. Since its inception in 1998, OpenTable has seated more than 830 million diners around the world. OpenTable is headquartered in San Francisco and available throughout the United States , as well as in Canada , Germany , Japan , Mexico , and the UK .


S.F.’s OpenTable agrees to $2.6 billion acquisition by Priceline

NEW YORK — Priceline has negotiated a $2.6 billion entree into the restaurant business.

The global travel booking king announced Friday it is acquiring San Francisco-based OpenTable in a deal that would put Priceline into a new business doing for restaurant reservations much what it does for hotel bookings.

The deal should give Priceline a new way to cater to its increasingly mobile-savvy customers, while parlaying Priceline’s global reach to expand OpenTable to other countries.

“Travelers are diners,” Priceline Group CEO and President Darren Huston said on a conference call. “It’s the same customers. There’s opportunity to cross-promote brands.”

In a statement, OpenTable CEO Matt Roberts cited Priceline’s expertise in online marketing globally on all types of devices.

“They have an exceptional track record of customer service in dozens of languages around the world,” Roberts said.

Priceline, based in Norwalk, Conn. will pay $103 per share, which is a 46 percent premium to OpenTable Inc.’s Thursday closing price of $70.43.

Shares of OpenTable soared 33.05, or nearly 47 percent to $103.46 in midday trading Friday. Priceline shares fell $22.16, or 1.8 percent, to $1,203.84.

Priceline, which generated sales of $6.8 billion last year, has made a series of acquisitions over the last decade, most recently last year’s purchase of Kayak.com, an online travel site. The acquisitions focused on travel — until now.

During the conference call Friday, Huston noted the latest deal doesn’t signal it’s going on any acquisition binges. In fact, Priceline’s main business is still growing well, he said. But he noted OpenTable offers an opportunity to increase the size of its market.

In an interview with The Associated Press, Huston said the company has seen OpenTable as an acquisition target for many years. But the time was right now.

OpenTable seats more than 15 million diners per month at more than 31,000 restaurants. OpenTable allows users to make free reservations at restaurants through its website and mobile apps. It makes money by charging restaurants fees for the bookings. Users can also read reviews and view menus through the website or mobile app.

OpenTable, founded in 1998, has enjoyed double-digit growth for the past several years and generated revenue of $190 million last year. That’s up 18 percent from the year before and more than triple its 2008 revenue of $55.8 million. In 2010, it purchased toptable.co.uk, a similar site in the United Kingdom.

OpenTable will remain headquartered in San Francisco and will operate as an independent business led by its current management team.

Huston said Priceline’s first goal is to expand OpenTable internationally. Users can already book restaurants in London, Berlin, Hong Kong and other cities, but Huston said it is seeking to add more cities. Because Priceline already has “offices in every major city in the world,” doing so should be seamless, he said.

OpenTable also is working on making it easier to sign up new restaurants to its service, said Huston. The company is creating a cloud-based system instead of using the hardware it now needs restaurants to install to use OpenTable.

At Priceline, an average of more than 1 million guests stay in accommodations booked through one of brands each night. It has relationships with more than 480,000 properties in more than 200 countries and territories worldwide.

Brian Sozzi of Belus Capital Advisors noted that competition for OpenTable has increased from services including Grubhub.com and Ureserv.com, but OpenTable still dominates in a fragmented market.

“This will be a one-stop solution to the customers,” he said. He noted that Priceline is becoming like an Amazon.com to travelers.

In an interview with the Associated Press, Huston said that the next big wave is tackling ways to use mobile technology to enhance the dining experience.

OpenTable is testing a service where the diners’ phone is connected to the restaurant’s payment system, he said. That means that as diners order they can see the bill increase as they order more and can pay without ever having to interact with the waiter. He said Priceline will help to expand that test around the country.

The company changed its name from Priceline.com to Priceline Group in April to better reflect the breadth of its business. Its brands also include Booking.com, priceline.com, agoda.com, and rentalcars.com.

Both companies’ boards unanimously approved the transaction, which is targeted to close in the third quarter.


Priceline May Make Gains from Buying Open Table

Tourism is a trillion-dollar industry, and Priceline.com Incorporated rules this space. Priceline's stock had a stunning performance over the last five years. It has been very successful in capturing the huge business opportunities presented by e-commerce in the last decade.

Smart Move of Buying Open Table

Priceline announced the acquisition of online restaurant reservation platform Open Table in a $2.6 billion cash deal. Although the price represents a considerable premium versus recent market prices for OpenTable, it looks like Priceline is making a smart move and positioning itself to capitalize on substantial growth opportunities in the years ahead.

Priceline will be paying $103 per share for Open Table, a premium of nearly 46% versus the closing price of around $70 per share for Open Table on Thursday. Understandably, this could create some concern among investors, who may feel that Priceline is paying too much -- however, it's also worth noting that Open Table still offers enormous room for growth.

According to Priceline President and CEO Darren Huston, "Open Table is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly valued booking experience for our global customers. We look forward to helping the OpenTable team accelerate their global expansion, increase the value offered to their restaurant partners, and enhance the end-to-end experience for our collective customers across desktop and mobile devices."

OpenTable covers a network of more than 31,500 restaurants, and the company makes more than 15 million reservations per month. Profit margins are under pressure as the company is actively investing for growth, but OpenTable is generating impressive sales growth.

Revenues during the quarter ending on March 31 increased 18% versus the same period in the prior year to $53.8 million, while seated diners totaled 46.7 million, a 25% increase versus the same quarter in 2013.

Valuation is always a matter of debate, especially when it comes to a highly dynamic growth company such as OpenTable. However, the acquisition makes a lot of sense from a strategic point of view.

Synergic Benefits

OpenTable is still in its initial stages when it comes to international expansion. The company produced approximately $7.8 million in revenues from global markets during the last quarter, representing less than 15% of total sales.

As of the end of the first quarter, OpenTable has international presence in the U.K. with 4,097 restaurants, Germany with 2,057 locations, and Japan with 1,567 restaurants. This means a total of 7,721 international restaurants, less than 25% of the total restaurant base of 31,583 locations.

One key area where Priceline has excelled over time is international expansion. The company is the undisputed market leader in hotel reservations in Europe via its widely popular Bookings.com platform, which covers a network of 455,000 hotels and other accommodations in 200 countries.

Priceline is performing remarkably well on the international front: International bookings increased by 37% during the first quarter of 2014. According to management, this was due to "increased penetration of core Western European and North American markets, but also very attractive growth in newer markets, including Eastern Europe, the Middle East, South America, and the Asia-Pacific region."

Priceline's presence and experience in international markets could be enormously valuable for OpenTable, and there are clear opportunities for cross-promotion, as travel and restaurants are closely related industries.

Both Priceline and OpenTable benefit from the network effect, meaning that their services become more valuable as they become bigger. OpenTable's platform becomes more attractive to diners as it offers a wider network of restaurants to choose from, and restaurants naturally benefit from a growing audience of potential customers. Diners and restaurants attract each other to the platform.

The same is valid for Priceline. Travelers want to go to the platforms where they can find more and better options, and companies like hotel operators, airlines, and car rental businesses choose to partner with the online travel agencies that can bring in more clients.

A bigger business means not only more money for Priceline and OpenTable, but also a more valuable service and increased competitive strength.

Priceline's management had done an excellent job acquiring different brands in the past. The most notable one was Booking.com, which proved to be exceptionally profitable. I believe that the acquisition of Open Table will complement Priceline's existing brand portfolio and will help Priceline expand further in the restaurant booking business. Priceline can also help OpenTable accelerate its global expansion.

Priceline delivered truly impressive results for the first quarter of 2014, and the company continues consolidating its leadership position in the online travel industry. The way things are going for the company, investors have solid reasons to expect sustained growth from Priceline Financial discipline is an important strength thatin the years ahead. has helped Priceline to thrive. The company is a proactive genius that knows how to surprise and delight customers with its offerings. Priceline has ruthlessly pursued every growth opportunity to stay ahead of its competitors.

With a market cap of about $61 billion, Priceline Group is the worlds most valued travel company. I am quite bullish about this company and believe that it is going to create greater shareholder returns.


Did Priceline Spend Too Much Buying OpenTable?

NEW YORK (TheStreet) -- I was very intrigued by the news Friday that online travel pricing site Priceline.com (PCLN) is spending $2.6 billion to buy online restaurant reservation site OpenTable (OPEN) .

When you have a deal like this there is always the issue of the impact on shares of the companies themselves and the impact on competitors, plus the question of whether Priceline spent too much buying OpenTable.

So I&aposm asking myself these two questions:

  • Why did Priceline buy OpenTable? 
  • What impact does the Priceline purchase of OpenTable have on their own stock prices, as well as the stock prices of their competitors?

Why Did Priceline buy OpenTable? With strong competitors such as TripAdvisor (TRIP) - Get Report , the trek to become the number one global online travel booking company can be made easier by automatically adding local dining to already established local lodging and transportation offerings.

OpenTable does local dining well and almost inconspicuously to the hungry diner. Last weekend, my party of four and I decided to dine at Katsuya on Vine in Los Angeles. (If you haven&apost been, go. You&aposll likely run into an actor, musician, or otherwise artistic notable person, and you&aposll see Rita Hayworth&aposs star right out front.)

OpenTable popped up from the Katsuya Web site and with a few, quick keystrokes, we were set for an 8:30 p.m. reservation and happily on our way. In the meantime, OpenTable gathered my personal information for future use -- to upsell future restaurant events and more. 

This from the OpenTable Web site: OpenTable empowers your staff by collecting useful information on each guest: a favorite wine, a food allergy, a special table or occasion.

OpenTable has a no-show rate of 5%, which is much better than industry standard. OpenTable says that only four of nine callers/emailers complete their reservation if they are delayed or put on hold. And OpenTable notes that one-third of their reservations are booked between 10 pm and 10 am. That&aposs huge because that is a time period when restaurants are not likely answering their phones. Imagine any restaurant not getting one-third of its intended reservations.

OpenTable is tight. The reservations are instantly visible to the restaurant&aposs staff which helps staff the staff efficiently. There are over 31,000 OpenTable restaurants paying only for seated diners, plus over 600 partners, including Google (GOOGL) - Get Report and Yelp (YELP) - Get Report .

These are all excellent reasons to answer the question, "Why did Priceline buy OpenTable?" but why would OpenTable want to be a member of the Priceline family?

OpenTable CEO Matt Roberts explained in a statement that Priceline is "a leader in e-commerce innovation" and has "an exceptional track record of customer service in dozens of languages around the world . " 

Priceline gets to benefit from the mingling of dining and e-commerce, plus excellent mobile presence and OpenTable gets to benefit from Priceline&aposs global exposure.

How has this potential deal, set to close in the third quarter of 2014, affected stock prices in the sector? 

The market seems to appreciate online local listing companies and their ability to grow, prosper and be purchased, like OpenTable, Yelp and Angie&aposs List (ANGI) - Get Report . It looks like the market was happy with and for OpenTable, as evidenced by the OpenTable stock price surge from $70.55 on Monday, to the $104.48 (up 48.1%) price at close on Friday, after the announcement was made. Shares now trade around $104, 25, up over 31% for the year to date.

But Priceline&aposs stock price went down Friday on the merger news. Was it because Priceline doesn&apost have the cash to complete the $2.6 billion cash offer? According to CNN/Money, "Priceline did not give immediate details about how it will finance the purchase. The company had only $1.3 billion in cash and cash equivalents on its balance sheet as of the end of the most recent quarter."

Priceline shares currently trade around $1,198, up 3% for the year to date.

Is Priceline paying too much? Whether it did or not, if you shorted Priceline, you came up with $40.62/share gain, though the exposure to get that gain is likely too much for most investors. How many individual shares can most people purchase at $1,229.92/share without betting the farm?

What&aposs my conclusion? It seems the market reacts favorably when a company is tight in the e-commerce/app/global/mobile world, and unfavorably if a company pays more than market value.

As always, it&aposs tough to make any blanket statements about anything in the stock market. There are no rules and we traders never say "always."  When you trade next time one company buys another, take note of these ideas over an excellent plate of sushi. I wish you

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.


What Will Priceline’s Rivals Buy to Beat Its OpenTable Acquisition?

If recent patterns hold up, there won’t be too long a wait before there’s an answer from a competitor to the Priceline Group’s blockbuster acquisition of OpenTable.

The usual suspects with wads of cash, credit, or Bitcoin — including Expedia, Google or TripAdvisor — are likely considering their next chess moves.

After the announcement June 13 that Priceline agreed to acquire OpenTable for $2.6 billion, it is easy to sense a certain euphoria among some players as further merger and acquisition activity seems as assured as the prospects of landing a restaurant reservation on a Monday night. Priceline’s stock took a light beating, falling 3%, but that shouldn’t deter competitors’ next strategic moves.

Don’t forget that Expedia Inc. agreed to acquire German metasearcher Trivago in December 2012 — only about six weeks after Priceline announced that it would purchase rival Kayak.

It’s very possible that TripAdvisor played a role in kicking off the current round of consolidation when it disclosed its relatively smallish acquisition of France-based restaurant reservations platform Lafourchette, which some call an OpenTable for Europe, in May 2014, although the Priceline-OpenTable deal likely was already in the works.

“The news about Priceline and Open Table makes all of us here feel like things are bound to get extra-interesting for anyone serving travelers in-destination,” says Barrie Seidenberg, CEO of tours and activities provider Viator.

Viator is a privately held company, but in certain corners of Wall Street there was a certain giddiness afoot.

OpenTable’s stock price spiked 48.3% on June 14, the day of the deal announcement, to $104.48, and the TripAdvisor of restaurants and local business, Yelp, saw its stock price surge to $74.92, a nearly 14% bump.

We’ve previously speculated about a potential Priceline acquisition of vacation rental leader HomeAway, and if the theory of Viator’s Seidenberg that companies serving travelers in-destination are shining bright, then you’ll understand why HomeAway’s stock price shot up 7.32% to $32.25 on the day of Priceline’s OpenTable announcement.

Certainly companies such as Yelp look particularly appetizing as the next piece of someone’s wedding cake, perhaps that of Google, which already owns Zagat, although Yelp’s $5.36 billion market cap would be a doable, yet hefty tab.

For Priceline, OpenTable may have been a relatively cost-conscious alternative to Yelp, and in OpenTable, which is developing a cloud-based solution to bring restaurant reservations online and has a mobile payments system, digitally adept Priceline may have found a kindred spirit.

TripAdvisor CEO Stephen Kaufer said recently there’s little excuse “for the lack of attention we’ve spent on restaurants and attractions,” and he added that TripAdvisor plans to allocate the resources in 2014 to begin to bring restaurants and attractions up to speed for the company.

Seidenberg of Viator notes that based on TripAdvisor’s recent market activity [such as the acquisition of Lafourchette] and Kaufer’s public comments it appears as though TripAdvisor is “poised to do lots of new things across the entire travel spectrum.”

“We’re excited about our leadership position in the tours and activities sector, and are looking forward to what promises to be a very interesting year,” Seidenberg says.

Beyond restaurants, if the OpenTable acquisition signals additional consolidation and larger companies getting more serious about tours and activities in-destination, then Berlin-based GetYourGuide, which already is a TripAdvisor partner, and companies offering B2B tours and activities solutions, could be in play.

“TripAdivisor is definitely growing more into the space, but it is still very early days,” says Johannes Reck, CEO of GetYourGuide. “Maybe they will acquire someone in the space, but maybe they will focus more on other stuff first.”

Asked if GetYourGuide has been the subject of any nibbles from TripAdvisor, Reck said: “We are totally committed to our long-term strategy of building the world’s biggest and best marketplace for finding great things to do in the destination.”

“The current mobile revolution that we are seeing is breathtaking in pace and we are 100% focussed on emerging as the winner out of this race,” Reck says.

Expedia could be heard from before the next consolidation binge plays itself out.

Expedia hasn’t done much on the dining front, and could be energized by what Priceline sees as a very lucrative and big new market for online travel agencies.

Getting into the restaurant reservations space through an acquisition could be a nice add-on for Expedia’s leisure travelers, but also has big potential for Expedia Inc. company Egencia’s business travel clients.

Expedia could soon make a move, just as it did with Trivago following Priceline’s acquisition announcement regarding Kayak.

On the other hand, Expedia could keep its proverbial head down and focus on global hotel expansion, hoping that Priceline’s OpenTable acquisition a little more than a year after Priceline acquired Kayak would prove to be an overwhelming distraction and stumble.


Priceline is buying OpenTable for $2.6B (confirmed)

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Discount travel giant Priceline Group has reportedly acquired restaurant booking service OpenTable for $2.6 billion in cash — expanding its reach beyond travel and into food service.

“OpenTable is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers,” Priceline Group CEO and President Darren Huston said in a statement.

Priceline offered $103 a share in cash for the company, a 46% premium over its closing price Thursday, according to the Wall Street Journal. The deal is said to close in the third quarter.

Priceline already has a firm grip on the travel booking market with both Booking.com and Kayak.com already in its arsenal, in addition of course to Priceline.com. Now the company is looking to keep its growth going. On June 10 the company bought Seattle-based hotel marketing agency Buuteeq.

Restaurant booking in many ways is a natural next step for Priceline. Right now OpenTable has 31,000 restaurants represented on its website, and there’s plenty of room to expand.

OpenTable charges restaurants monthly fees to bring in diners.

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Priceline Group to Acquire OpenTable for $2.6 Billion

The Priceline Group found the sixth company to fill the chair at its table of portfolio companies, agreeing to acquire OpenTable for $2.6 billion, a Priceline spokesperson confirmed.

“Our companies are built on similar foundations,” Priceline Group spokesperson Leslie Cafferty told Skift. “we both work tirelessly to deliver a supreme digital booking experience for our customers and world-class marketing solutions for our partners, so this is a natural extension for the Group.”

“The kind of work that we do day-to-day is very similar,” Priceline CEO Darren Huston said in an interview with the Wall Street Journal, which broke the story. “It’s just a different marketplace.

The move takes place only several weeks after TripAdvisor acquired European restaurant reservations platform lafourchette.

Only a few days ago Huston was musing about how the company was actively considering adding a big acquisition to find a company to work in the Group along with Booking.com, Kayak, Priceline.com, Agoda and Rentalcars.com.

The Priceline Group found it in OpenTable, the restaurant reservations platform that attracts some 15 million restaurant reservations monthly.

In an SEC filing, OpenTable stated that on June 12 its “supporting stockholders,” Matthew Roberts, I. Duncan Robertson, Michael Dodson, Joseph Essas, A. George “Skip” Battle, J. William Gurley, Robert Hohman, Thomas Layton, Daniel Meyer and Paul Pressler agreed to the Priceline Group’s tender offer, and OpenTable agreed to terminate any alternative proposals with unspecified third parties.

The Wall Street Journal reported that the Priceline Group agreed to offer OpenTable $103 per share in an all-cash deal, and that would be a 46% premium over its closing share price June 12.

The deal, which is expected to close in the third quarter, is larger than the Priceline Group’s 2013 acquisition of Kayak for $2.1 billion.

The deal immediately puts the Priceline Group into competition with Yelp and TripAdvisor, among others, in the restaurant space — a relatively new arena for the Priceline Group.

But, it makes total sense and it has much to do with the mobile revolution.

The agreement to acquire OpenTable is about mobile, and the push by TripAdvisor and now Priceline to fully engage their customers on the go when they are already in a destination — or when they are traveling for business.

Huston said as much recently, explaining that mobile is about engagement and not just about bookings.

Intriguingly, in a recent presentation, Huston mentioned in passing that the Priceline Group thinks about business travel — an area that it hasn’t targeted openly — but OpenTable is an attractive acquisition as a means to capturing the allegiances of business travelers as they are mulling their dining options.

OpenTable already has a huge customer base — 620 million diners, according to its website.


Watch the video: Nightly Business Report: Priceline buys OpenTable (July 2022).


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