UAL Corp. Unit to Acquire MyPoints.com
June 4, 2001 5:07 pm EST
By Patrick Markey
NEW YORK (Reuters) - United Airlines, the world's second-largest airline, said on Monday that United NewVentures, a UAL Corp. (UAL.N) unit that manages its Internet initiatives and investments, will buy online direct marketer MyPoints.com Inc. (MYPT.O), in a deal worth about $112.5 million.
The Chicago-based air carrier said United NewVentures will make a cash tender offer of $2.60 a share for each of the outstanding common shares of MyPoints.com.
Shares of MyPoints.com spiked sharply after the news, and closed up 96 cents, or 60 percent, to close at $2.56 on Nasdaq.
United Airlines, which is owned by UAL Corp., said the acquisition will allow it to better inform customers about offers, upgrades and fares through its united.com and Mileage Plus program and draw a wider audience.
The airline will gain access to MyPoints software and a database of 16 million users.
"This boosts our efforts to attract customers and will serve as a platform for future growth," said Andy Plews, spokesman for UAL Corp. "It's putting our product in front of more people," he said.
San Franciso-based MyPoints.com awards consumers who respond to targeted e-mails from its advertising clients with points redeemable for gift certificates or other goods, said MyPoints spokesman Geoff Ossias.
MyPoints expects the deal to close by late July or early August if 90 percent or more of the shares are tendered, Ossias said.
U.S. airlines are increasingly reaching out to consumers through their Web sites with special offers and fares, and trying to entice travelers to buy tickets online, which saves the carriers distribution costs.
"This is a trend in the industry. The more you can control your distribution, the better off you are -- you save costs, and you have more contact with customers," said Ray Neidl, an ABN AMRO senior airline analyst.
Industry watchers expect the online travel market to expand rapidly over the next few years as consumers grow more comfortable with searching for and purchasing fares and tickets over the Internet.
Already, 29 percent of Internet users in the U.S. purchase travel online, and another 29 percent use the Internet to research their travel plans, according to research firm Jupiter Media Metrix.
UAL shares closed down 86 cents, or 2.39 percent, to $35.10 on the New York Stock Exchange.
That makes sense. The reason is that they can develop online selling of tickets through Dot Coms. And that is a good move.
Besides, that proves that UAL is still capable of keeping itself self-sustained and is a very healthy company indeed.
Comments? Nice ones please. Thanks