Press Release: The Special Committee of the Board of Directors of Expedia, Inc.
July 12, 2002
BELLEVUE, WA -- The Special Committee of the Board of Directors of Expedia, Inc. (Nasdaq: EXPE) yesterday commented
on Expedia's prospects in light of the statements made by USA Interactive (Nasdaq: USAI), Expedia's majority shareholder,
regarding its intent to acquire the remaining shares in Expedia. On June 3, USAI indicated publicly its intent
to commence an exchange offer whereby USAI would seek to increase its equity ownership in Expedia to up to 100%.
USAI subsequently stated on June 5 that it did not intend to commence an exchange offer in the near future, but
has not withdrawn its statement of intent to commence an exchange offer.
The Special Committee was formed to promote the interests of Expedia and the shareholders of Expedia other than
USAI and its affiliates. The Special Committee has engaged Morgan Stanley & Co. Incorporated to act as its
independent financial advisor and Shearman & Sterling to act as its independent legal counsel to assist the
Special Committee in connection with its review and evaluation of the USAI proposal and any offer actually presented
by USAI.
The Special Committee, assisted by its advisors, has been reviewing USAI's proposal since it was received and has
conducted a due diligence review of Expedia's business and prospects as a standalone company, including reviews
with management.
Based upon this review, the Special Committee believes that Expedia's standalone prospects continue to be excellent.
"This management team has an outstanding track record of success and has shown its ability to simultaneously
build the business at industry-leading growth rates, operate at high levels of profitability, and gain market share
from key competitors," said Special Committee Chairman Greg Maffei. "The Special Committee is highly
confident in both the near-term and long-term prospects for Expedia as a standalone company," Mr. Maffei continued.
"For these reasons, we believe that Expedia's stock price significantly undervalues the long-term prospects
of Expedia. Rather than trading at levels reflecting Expedia's potential -- as we believe should be the case --
it appears that Expedia's stock price has inappropriately become linked to USAI's stock price based on USAI's statements."
If a formal offer is commenced by USAI, the Special Committee intends to promptly advise the minority shareholders
of Expedia of its position with respect to such an offer.
Important Disclosures
IF AN EXCHANGE OFFER FOR EXPEDIA SHARES IS COMMENCED, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ USA INTERACTIVE'S
EXCHANGE OFFER STATEMENT AND EXPEDIA'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN THESE DOCUMENTS AND OTHER DOCUMENTS FILED BY EXPEDIA AND
USA INTERACTIVE FREE OF CHARGE AT THE SEC'S WEBSITE AT WWW.SEC.GOV. IN ADDITION, EXPEDIA'S SOLICITATION/RECOMMENDATION
STATEMENT ON SCHEDULE 14D-9 MAY ALSO BE OBTAINED FREE OF CHARGE BY CONTACTING EXPEDIA, INC., 13810 SE EASTGATE
WAY, SUITE 400, BELLEVUE, WASHINGTON, 98005, ATTENTION: INVESTOR RELATIONS.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include the information relating to possible or assumed future results
of operations of Expedia and its subsidiaries, including those preceded by, followed by or that include the words
"believes," "could," "projects," "budgets," "estimates," "intends,"
"expects," "anticipates" or similar expressions. These statements reflect the current views
of the Special Committee of Expedia's Board of Directors with respect to future events, and are based on information
currently available to the Special Committee. These forward-looking statements are subject to risks, uncertainties
and assumptions that may affect the operations, performance, development and results of Expedia's and its subsidiaries'
business. The following important factors, in addition to those described in Expedia's filings with the Securities
and Exchange Commission, could affect the future results of Expedia and could cause those results to differ materially
from those expressed in the forward-looking statements: material adverse changes generally or in economic conditions
in the markets served by our businesses; future regulatory actions and conditions in our businesses' operating
areas; competition from others; successful integration of recently acquired businesses; product demand and market
acceptance; the ability to protect proprietary information and technology or to obtain necessary licenses on commercially
reasonable terms; the ability to expand into and successfully operate in foreign markets; and obtaining and retaining
key executives and employees. You are cautioned not to place undue reliance on these forward- looking statements,
which are made as of the date of this document. The Special Committee undertakes no obligation to update or revise
the forward- looking statements contained in this document, whether as a result of new information, future events
or any other reason.
SOURCE: The Special Committee of the Board of Directors of Expedia, Inc.