Yahoo Japan, the joint venture between Japnese telecom firm SoftBank and Yahoo, plans to acquire Ikyu, a popular online travel and restaurant reservation platform in Japan, for around $830 million.
The company had offered to pay ¥3,433 ($28.36) per share for Ikyu, which lists on the Japanese stock exchange. It represented a 42-per cent premium on Ikyu's most recent share price, and meant Yahoo Japan could pay just over ¥100 billion for the transaction, amounting to $829 million on the basis of current exchange rates.
The company, which was founded in 1998, started offering online bookings for hotels and Japanese-style 'Ryokan' inns two years later. It branched out into restaurant bookings in 2006 and, today claimed 4.13 million customers with a 'no frills' hotel offering for business users, spa bookings, and an overseas hotel booking platform.
According to commentators, with Yahoo Japan offering services in travel and restaurant booking, much synergy existed between the two. Yahoo Japan said the acquisition would help boost the company's core markets of hotel and restaurant bookings, while also helping entry into new verticals to become ''a platform providing a rich life for high-end customers.''
The deal comes as Yahoo Japan's second since Nikesh Arora, also president of controlling shareholder SoftBank Group Corp, was named chairman in June.
Yahoo Japan had been on a diversification drive this year with investments in companies including a venture with BuzzFeed Inc and Sony Corp's real estate unit.
With Ikyu.com Yahoo Japan would be ale to cover a broader range of online travel and restaurant services, according to analysts at Jefferies Japan Ltd, led by Hiroko Sato. There was ''huge potential'' for online restaurant bookings since only 1 per cent to 2 per cent of reservations were now made that way in Japan, they wrote.
Yahoo Japan had been running its own Yahoo! Travel service since 1997, and the company announced a revamp of the service in February for operating lodging and reservations directly.