Priceline.com Acquires Active Hotels

Priceline.com announced today that it acquired Active Hotels Ltd. in a cash transaction valued at approximately US$161
million. Priceline.com said it intends to retain Active Hotels’
current management team, which will continue to manage Active Hotels
as an independent business. Priceline.com also said that Active
Hotels’ three top executives and selected other employees reinvested a
portion of the acquisition proceeds back into the Active Hotels
business.

Active Hotels works with a wide range of 8,000 properties from
B&Bs to 5-star hotels in the UK and throughout Europe, including major
international chains and independents. Its distribution network
encompasses company-owned Web sites, such as activereservations.com,
as well as approximately 1,500 Web sites operating throughout Europe.
Active Hotels’ reservation services are available in English, French,
Spanish, German and Italian.

“As one of the fastest growing hotel services in the European
market, Active Hotels will play an important part in priceline’s
growth plans,” said priceline.com President and Chief Executive
Officer Jeffery H. Boyd. “Andrew Phillipps and his team have built a
profitable, supplier-friendly business, which mirrors the positioning
of the priceline and Travelweb hotel businesses.”

“This deal is great news for all involved,” said Andrew Phillipps,
Chief Executive of Active Hotels. “For our hotel customers, we expect
that this will provide additional US demand from one of the market
leaders. We believe that our pricing model will continue to put real
pressure on competitors. For Web sites that work with us, the deal
should provide low-priced hotel rooms in the US, complementing our
market-leading European stock. Finally, this is great news for Active
Hotels and its staff. Under priceline.com’s ownership and with their
backing, we plan to expand still faster and consolidate our already
strong position.”

Active Hotels’ gross bookings for the 12 months ending September
30, 2004 are expected to be approximately US$160 million, up
approximately 100% year-over-year. Gross bookings refer to the total
dollar value inclusive of taxes and fees of all hotel room nights
purchased by consumers. Active Hotels’ revenues for the 12 months
ending September 30, 2004 are expected to be approximately US$22
million, up approximately 115% year-over-year. Active Hotels has been
profitable since the 1st quarter of 2003. Priceline.com said that it
expected the acquisition to be accretive to its earnings (before
non-cash amortization expense associated with the acquisition) for the
4th quarter 2004 and for calendar 2005.

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Priceline stated that the acquisition created opportunities for
Active and priceline to work together to expand their businesses.
“Active Hotels has longstanding distribution relationships with a
significant number of other European travel sites and we intend to
support these relationships with added product from priceline.com and
Travelweb for U.S. travel,” said Glenn Fogel, Senior Vice President -
International of priceline.com. “We also believe that we can sell
Active Hotels’ inventory to our large U.S. customer base for their
European travel.”
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