Robbins Arroyo LLP: Acquisition of HomeAway, Inc. (AWAY) by Expedia, Inc. (EXPE) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of HomeAway, Inc. (NASDAQ: AWAY) by Expedia, Inc. (NASDAQ: EXPE). On November 4, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Expedia will acquire HomeAway. Under the terms of the agreement, HomeAway shareholders will receive $10.50 in cash and 0.2065 of a share of Expedia for each share of HomeAway they own, the value of which is equivalent to $38.31 per share of HomeAway.
Is the Proposed Acquisition Best for HomeAway and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at HomeAway is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $38.31 merger consideration represents a premium of only 20.5% based on HomeAway’s one-week average closing price. This premium is significantly below the average one-week premium of nearly 43.3% for comparable transactions within the past three years. Further, the $38.31 merger consideration is significantly below the target prices of three analysts, ranging from $40.00 set by an analyst at Stephens Inc. on June 11, 2015, to $39.00 set by an analyst at Piper Jaffray on January 20, 2015. In the last three years, HomeAway traded as high as $48.90 on February 20, 2014, and most recently traded above the merger consideration – at $38.77– on April 3, 2014.
On November 4, 2015, HomeAway reported strong earnings results for its third quarter 2015. Total revenue for the quarter was $130.7 million, an increase of 11.6% compared to the same period last year. Net income attributable to HomeAway for the quarter was $10.4 million, an increase of 112.2% compared to the same period last year. Additionally, HomeAway has beat consensus analyst estimates for adjusted EPS and sales in three out of its past four quarters.
In light of these facts, Robbins Arroyo LLP is examining HomeAway’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
HomeAway shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
HomeAway shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.