Expedia's back in the buyout rumor mill, but Diller scoffs

Stop me if you’ve heard this one before: Expedia Inc. might be a buyout target.

Shares of the online travel services firm jumped as high as $23.81 today, from Tuesday’s close of $21.74, on rumors that Chairman Barry Diller might want to take the company private.

The stock pulled back after Diller, attending a conference in Carlsbad, Calif., seemed to deride the buyout talk. Reuters reports from there: "Asked by a reporter whether to believe rumors that he wanted to take the company private, Diller replied: 'I wouldn't.' " He went on: "I am so suspect of current markets and the hedge funds and momentum selling/buying. I think there is a plot behind everything."

Hmmm.

Expedia’s shares settled at $22.75, up $1.01 (or 4.6%) for the day but still down 28% year to date.

The company also was in the buyout rumor mill in early April. That one was good for a 15% jump in the stock April 1-2.

Given Diller’s penchant for deal-making, investors in his companies have to live with the possibility that anything could happen. Last June he announced that Expedia would buy back more than 40% of its shares. But the buyback total was slashed by 80% after financing dried up amid Wall Street’s credit crunch. Which raises the question of whether credit would be any easier to get today for a full buyout of the firm.

Diller, of course, now is busy with plans to split his IAC/InterActive Corp. into five companies later this year.

Photo: Barry Diller. Stuart Ramson/RushmoreDrive.com