Exhibit
(a)(1)(H)
SUPPLEMENT
DATED JULY 25, 2007
TO THE OFFER TO PURCHASE DATED JUNE 29, 2007
Expedia, Inc. Has Amended its
Offer to Purchase for Cash
And is Now Offering to
Purchase
Up to 25,000,000 Shares of
its Common Stock
At a Purchase Price Not Greater
Than $30.00
Nor Less Than $27.50 Per
Share
THE TENDER OFFER, PRORATION
PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON WEDNESDAY, AUGUST 8, 2007, UNLESS EXPEDIA
EXTENDS THE TENDER OFFER.
To Our
Stockholders:
Expedia Inc., a Delaware corporation (“Expedia”), has
amended its tender offer to purchase shares of our common stock,
par value $.001 per share, previously set forth in the offer to
purchase dated June 29, 2007 (the “offer to
purchase”). Expedia is now offering to purchase for cash up
to 25,000,000 shares of common stock, upon the terms and
subject to the conditions set forth in the offer to purchase and
related letter of transmittal (which together, as supplemented
by this supplement and as they may be further amended and
supplemented from time to time, constitute the “tender
offer”).
Except as otherwise set forth in this supplement, the terms and
conditions set forth in the offer to purchase and the letter of
transmittal are applicable in all respects to the tender offer.
The information set forth below should be read in conjunction
with the offer to purchase and the letter of transmittal. Terms
defined in the offer to purchase but not defined in this
supplement have the meanings ascribed to them in the offer to
purchase.
THE TENDER OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING
OR ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE TENDER
OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS. SEE BELOW AND
“THE TENDER OFFER — SECTION 7” IN THE
OFFER TO PURCHASE.
IMPORTANT
If you wish to tender all or any part of your shares, you must
either: (1)(a) complete and sign a letter of transmittal
according to the instructions in the letter of transmittal and
mail or deliver it, together with any required signature
guarantee and any other required documents, including the share
certificates, to The Bank of New York, the depositary for the
tender offer, or (b) tender the shares according to the
procedure for book-entry transfer described in Section 3 of
the offer to purchase, or (2) request a broker, dealer,
commercial bank, trust company or other nominee to effect the
transaction for you.
If your shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, you should
contact that person if you desire to tender your shares. If you
desire to tender your shares and (1) your share
certificates are not immediately available or cannot be
delivered to the depositary, (2) you cannot comply with the
procedure for book-entry transfer, or (3) you cannot
deliver the other required documents to the depositary by the
expiration of the tender offer, you must tender your shares
according to the guaranteed delivery procedure described in
“The Tender Offer — Section 3” in the
offer to purchase.
Holders or beneficial owners of shares under the Expedia
Retirement Savings Plan (if such shares are not, at the time of
tender, subject to any restrictions on transferability) who wish
to tender any of such shares in the tender offer must follow the
separate instructions and procedures described in “The
Tender Offer — Section 3” in the offer to
purchase.
Our board of directors has approved the tender
offer. However, neither we nor our board of directors
makes any recommendation to you as to whether you should tender
or refrain from tendering your shares or as to the price or
prices at which you may choose to tender your shares. You must
make your own decision as to whether to tender your shares and,
if so, how many shares to tender and the price or prices at
which to tender your shares. In so doing, you should read
carefully the information in this supplement, in the offer to
purchase and in the letter of transmittal, including our reasons
for making the tender offer. Our directors and executive
officers and Liberty Media Corporation have advised us that they
do not intend to tender any shares in the tender offer.
You may direct questions and requests for assistance to
MacKenzie Partners, Inc., the information agent for the tender
offer, at their address and telephone number set forth on the
last page of this supplement. You may also direct requests for
additional copies of this supplement, the offer to purchase, the
letter of transmittal or the notice of guaranteed delivery to
the information agent.
July 25,
2007
The
following information amends and supplements the information
contained in the offer to purchase:
QUESTIONS
AND ANSWERS
How has
Expedia amended the tender offer?
We have amended the tender offer to reduce the number of shares
of common stock that we are offering to purchase, to remove the
“financing condition” and the condition that Expedia
have received a satisfactory solvency opinion, to which the
original offer was subject, and to provide stockholders with the
additional information included in this supplement.
Why did
Expedia reduce the number of shares it is offering to purchase
in the tender offer?
We concluded that the necessary financing for the maximum number
of shares that we were originally offering to purchase was not
available on terms satisfactory to Expedia due to current
conditions in the credit markets. As a result, we determined to
reduce the number of shares that we are offering to purchase in
the tender offer and to remove the financing condition and the
condition that Expedia have received a satisfactory solvency
opinion.
How will
Expedia pay for the shares?
Assuming that 25,000,000 shares are purchased in the tender
offer at a price between $27.50 and $30.00 per share, the
aggregate purchase price will be between $687.5 million and
$750.0 million. Expedia currently expects to fund the
purchase of shares under the tender offer and to pay related
expenses through available borrowing capacity under our existing
bank credit facility and cash on hand. The facility is described
in “The Tender Offer — Section 12” in
the offer to purchase. The facility and amendments thereto are
filed as exhibits to the Tender Offer Statement on
Schedule TO that we have previously filed with the
Commission.
How will
the purchase of shares in the tender offer affect Expedia’s
earnings per share?
In the event that Expedia repurchases 25,000,000 shares of
common stock pursuant to the tender offer, Expedia believes the
tender offer will be neutral to slightly accretive to earnings
per share. However, the impact of the tender offer on
Expedia’s earnings per share will depend upon, among other
factors, the price at which we purchase shares in the tender
offer, the applicable interest rate on borrowings under our
existing credit facility to fund the purchase of shares in the
tender offer, the use of cash on hand, and the terms and
conditions of any indebtedness we may incur either to refinance
such borrowings or fund general corporate purposes from time to
time.
What will
the purchase price for the shares be?
We will determine the purchase price that we will pay per share
as promptly as practicable after the tender offer expires. The
purchase price will be the lowest price at which, based on the
number of shares tendered and the prices specified by the
tendering stockholders, we can purchase 25,000,000 shares,
or such fewer number of shares as are properly tendered and not
properly withdrawn prior to the expiration date. The purchase
price will not be greater than $30.00 nor less than $27.50 per
share. We will pay this purchase price in cash, without
interest, for all the shares we purchase under the tender offer,
even if some of the shares are tendered at a price below the
purchase price.
How many
shares will Expedia purchase?
We will purchase 25,000,000 shares properly tendered in the
tender offer, or such fewer number of shares as are properly
tendered and not properly withdrawn prior to the expiration
date. The 25,000,000 shares represent approximately 9% of
our outstanding common stock as of July 13, 2007. The
25,000,000 shares represent approximately 8% of the total
number of shares of our outstanding common stock and
Class B common stock and 5% of the combined voting power of
our outstanding common stock and Class B common stock as of
July 13, 2007. Expedia expressly reserves the right to
purchase an additional number of shares of common stock not to
exceed 2% of the outstanding shares of common stock, and could
decide to purchase more shares, subject to applicable legal
requirements. The tender offer is not conditioned on any minimum
number of shares being tendered.
1
What will
happen if more than 25,000,000 shares are tendered at or
below the purchase price?
If, at the expiration date, more than 25,000,000 shares (or
such greater number of shares as we may elect to purchase,
subject to applicable law) are properly tendered at or below the
purchase price and not properly withdrawn, we will buy shares:
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first, from all holders of “odd lots” (holders of less
than 100 shares) who properly tender all their shares at or
below the purchase price selected by us and do not properly
withdraw them before the expiration date;
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second, on a pro rata basis from all other stockholders who
properly tender shares at or below the purchase price selected
by us, other than stockholders who tender conditionally and
whose conditions are not satisfied; and
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third, only if necessary to permit us to purchase
25,000,000 shares (or such greater number of shares as we
may elect to purchase, subject to applicable law) from holders
who have tendered shares at or below the purchase price subject
to the condition that a specified minimum number of the
holder’s shares be purchased if any of the holder’s
shares are purchased in the tender offer (for which the
condition was not initially satisfied) by random lot, to the
extent feasible. To be eligible for purchase by random lot,
stockholders whose shares are conditionally tendered must have
tendered all of their shares.
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What are
the conditions to the amended tender offer?
Except for the receipt of necessary financing and receipt of a
solvency opinion, which are no longer conditions to the tender
offer, all of the conditions to the tender offer set forth in
“The Tender Offer — Section 7” in the offer
to purchase remain conditions to the amended tender offer.
If I
already tendered my shares in the offer, do I have to do
anything now?
No. Stockholders who validly tendered their shares previously
and have not withdrawn them do not have to take any further
action.
Can I
withdraw my previously tendered shares?
You may withdraw all or a portion of your tendered shares at any
time prior to the time the shares are accepted for payment,
after which they cannot be withdrawn except under very limited
circumstances. See “The Tender Offer —
Section 4” in the offer to purchase.
Is the
information in the offer to purchase showing the pro forma
effect of the tender offer and financing still
applicable?
No. The summary unaudited pro forma consolidated financial
information in “The Tender Offer —
Section 10” in the offer to purchase was prepared
assuming that 116,666,665 shares of common stock would be
purchased in the tender offer and that Expedia would incur a
significantly higher level of indebtedness to fund the purchase
of shares.
How will
the tender offer affect the stock ownership levels of Barry
Diller and Liberty Media Corporation?
As of July 13, 2007, Expedia had issued and outstanding
279,304,467 shares of common stock, 25,599,998 shares
of Class B common stock, 846 shares of Series A
preferred stock convertible into 846 shares of common
stock, outstanding warrants to purchase 34,641,420 shares
of common stock and outstanding options to purchase
20,527,384 shares of common stock. The
25,000,000 shares that Expedia is offering to purchase
under the tender offer represent approximately 9% of the shares
of common stock outstanding as of July 13, 2007 and 7% of
the shares of common stock assuming exercise of all outstanding
and exercisable warrants and options and the conversion of all
outstanding shares of Class B common stock and
Series A preferred stock.
The table below updates the information regarding the share
ownership of Barry Diller, Expedia’s Chairman and Senior
Executive, and Liberty Media Corporation included in the
corresponding table in “The Tender Offer —
2
Section 12” in the original offer to purchase. We are
including the revised information in this supplement in order to
provide stockholders with updated information regarding
Mr. Diller’s and Liberty Media’s ownership and
voting percentages as of July 13, 2007 after giving effect
to the tender offer, assuming Expedia purchases
25,000,000 shares in the tender offer and that
Expedia’s directors and executive officers and Liberty
Media do not tender any shares. Except for the revised
assumptions to reflect the reduced number of shares that Expedia
is offering to purchase and updating the information to
July 13, 2007, the information in the table below was
prepared on the same basis as the information in the
corresponding table in the original offer to purchase.
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Percent of Common
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Percent of Votes
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Expedia Common Stock
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Expedia Class B Common Stock
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Percent of Votes
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Stock After Tender
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(All Classes) After
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Beneficial Owner
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Shares
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%
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Shares
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%
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(All Classes)
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Offer(+)
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Tender Offer(+)
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Liberty Media Corporation
12300 Liberty Blvd.
Englewood, CO 80112
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69,219,787
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(1)
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22.70%
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25,599,998
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(2)
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100%
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55.97%
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24.73%
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58.51%
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Barry Diller
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84,345,775
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(3)
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26.83%
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25,599,998
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(4)
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100%
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57.77%
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29.14%
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60.55%
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Assuming Expedia purchases 25,000,000 shares pursuant to
the tender offer and that Expedia’s directors and executive
officers and Liberty Media do not tender. |
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(1) |
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Based on information filed on Schedule 13D/A with the SEC
on June 28, 2007 by Liberty Media, Mr. Diller and the
BDTV Entities. Consists of (i) 43,619,789 shares of
Expedia common stock held by Liberty Media,
(ii) 1,176,594 shares of Class B common stock
held by Liberty Media and (iii) 24,423,404 shares of
Class B common stock held by the BDTV Entities. The
“BDTV Entities” consist of BDTV Inc., BDTV II Inc.,
BDTV III Inc. and BDTV IV Inc. Pursuant to a Stockholders
Agreement, dated as of August 9, 2005 by and between
Liberty Media and Mr. Diller (the “Stockholders
Agreement”) described below, Mr. Diller generally has
the right to vote all of the shares of Expedia common stock and
Class B common stock held by Liberty Media and the BDTV
Entities. |
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Consists of 1,176,594 shares of Expedia Class B common
stock held by Liberty Media and 24,423,404 shares of
Expedia Class B common stock held by the BDTV Entities.
Pursuant to the Stockholders Agreement, Mr. Diller
generally has the right to vote all of the shares of Expedia
common stock and Class B common stock held by Liberty Media
and the BDTV Entities. |
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Based on information filed on Schedule 13D/A with the SEC
on June 28, 2007 by Liberty Media, Mr. Diller and the
BDTV Entities. Consists of (i) 5,441,618 shares of
Expedia common stock owned by Mr. Diller, (ii) options
to purchase 9,500,000 shares of Expedia common stock held
by Mr. Diller, (iii) 184,370 shares of Expedia
common stock held by a private foundation as to which
Mr. Diller disclaims beneficial ownership,
(iv) 24,423,404 shares of Expedia Class B common
stock held by the BDTV Entities (see footnote 1 above),
(v) 43,619,789 shares of Expedia common stock held by
Liberty Media (see footnote 1 above) and
(vi) 1,176,594 shares of Expedia Class B common
stock held by Liberty Media (see footnote 1 above). Pursuant to
the Stockholders Agreement, Mr. Diller generally has the
right to vote all of the shares of Expedia common stock and
Class B common stock held by Liberty Media and the BDTV
Entities. Excludes shares of Expedia common stock and options to
purchase shares of Expedia common stock held by Diane Von
Furstenberg, Mr. Diller’s spouse, as to which
Mr. Diller disclaims beneficial ownership. |
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Consists of 1,176,594 shares of Expedia Class B common
stock held by Liberty Media and 24,423,404 shares of
Expedia Class B common stock held by the BDTV Entities.
Pursuant to the Stockholders Agreement, Mr. Diller
generally has the right to vote all of the shares of Expedia
Class B common stock held by Liberty Media and the BDTV
Entities. |
3
MISCELLANEOUS
We have not authorized any person to make any recommendation
on our behalf as to whether you should tender or refrain from
tendering your shares in the tender offer. We have not
authorized any person to give any information or to make any
representation in connection with the tender offer other than
those contained in this supplement, in the offer to purchase or
in the letter of transmittal. If given or made, you must not
rely upon any such information or representation as having been
authorized by us.
We are not making the tender offer to (nor will we accept any
tender of shares from or on behalf of) holders in any
jurisdiction in which the making of the tender offer or the
acceptance of any tender of shares would not be in compliance
with the laws of such jurisdiction. However, we may, at our
discretion, take such action as we may deem necessary for us to
make the tender offer in any such jurisdiction and extend the
tender offer to holders in such jurisdiction.
We filed with the Commission an Issuer Tender Offer Statement on
Schedule TO dated June 29, 2007, an Amendment
No. 1 to Schedule TO dated June 29, 2007 and an
Amendment No. 2 to Schedule TO dated July 23,
2007, together with exhibits, and may file additional amendments
thereto. The Schedule TO, including the exhibits and any
amendments or supplements thereto, may be examined and copies
may be obtained, at the same places and in the same manner as is
set forth in “The Tender Offer —
Section 11” in the offer to purchase with respect to
information about Expedia.
Please direct any questions or requests for assistance and any
requests for additional copies of this supplement, the offer to
purchase, the letter of transmittal or the notice of guaranteed
delivery to the information agent at the telephone number and
address set forth below. Stockholders also may contact their
broker, dealer, commercial bank, trust company or nominee for
assistance concerning the tender offer.
The information agent for the tender offer is:
105 Madison Avenue
New York, New York 10016
(212) 929-5500
(call collect)
E-mail:
proxy@mackenziepartners.com
or
Call Toll Free
(800) 322-2885
July 25, 2007
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