Business

Priceline goes on a $1.8B Kayak trip

Priceline.com, the most valuable online-travel agency, has agreed to buy Kayak Software Corp. for $1.8 billion in cash and stock to expand its Web-based travel services.

Kayak shareholders will receive $40 a share, the companies said in a statement. That price represents a 29 percent premium over Kayak’s closing price of $31.04 yesterday, and it includes about $500 million in cash as well as $1.3 billion in equity and assumed stock options.

Priceline has been using acquisitions to add customers as it works to grow sales and fend off competition in a sluggish economy. Kayak, which raised $91 million in an initial public offering in July, lets travelers compare prices and make reservations for hotels, flights, cars and vacations.

“It is obviously a great source of customers for Priceline,” said Andre Sequin, an analyst at RBC Capital Markets. “We weren’t really expecting it on our end. Priceline’s done very well in this space on their own.”