Name-your-price pioneer Priceline.com (Nasdaq: PCLN) announced Tuesday that it is bringing its service to consumers in Australia and New Zealand by forming a new company Down Under.
The new company — to be called MyPrice — will be led by former Telstra Corp. Ltd. CEO Frank Blount and will start by offering leisure airline tickets. It plans to expand its pricing services to include hotels and rental cars, financial services, loans and insurance, telecommunications and autos, the companies said.
MyPrice will be funded by Priceline and SFN Investments, a group of business executives and investors from Australia and elsewhere. While the size of the investment was not disclosed, the companies said that MyPrice will pay Priceline an annual licensing fee for its intellectual property. In addition, Priceline will purchase a convertible note allowing it to take an equity stake of up to 50 percent in the new company.
Until the note is converted, Priceline will not hold any equity stake and will not include results from the Australian venture in its financial statements.
Telstra, meanwhile, plans to take a five percent equity stake in MyPrice. Blount, who said he had a “tremendous time” during his seven years at Telstra, was named businessman of the decade by the Australian Financial Review. Blount brings with him Peter Shore, former managing director of commercial and consumer operations for Telstra. Shore will be chief executive of MyPrice.
“The international market is a tremendous opportunity for us,” said Priceline Chairman and Chief Executive Officer Richard Braddock. “Our goal is to quickly develop international platforms for our multi-category demand collection system.”
Last month, the company announced a venture with Hong Kong’s Hutchinson Whampoa Ltd. to offer services in several Asian countries, including China, Taiwan and Indonesia.
Busy at Home
Priceline is also expanding domestically. Earlier this week, the company unveiled a new gasoline pricing service, and is targeting credit card and long-distance telephone services for later this year.
The company hired Heidi Miller, former chief financial officer at Citigroup, to be CFO and head development efforts both at home and abroad.
Priceline said it expects to complete the MyPrice transaction “in the next several weeks,” after receiving Australian government approval. The announcement was made after the close of trading Tuesday.
At mid-morning in New York Wednesday, Priceline shares were up 4 13/16 at 60 3/4.