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TimeSharing Today ® $4. Issue #64 Jul/Aug, 2002

The Independent Voice of Vacation Owner-

Interval International Acquired

USA Interactive adds exchange company to portfolio for $578 million

USA Interactive recently announced an agreement to purchase Interval Interna- tional ("Interval") from Willis Stein & Partners, a Chicago-based private equity in- vestment firm, and other investors, for approximately $578 million. The consideration will be paid in cash (50%) and shares of USA common stock (50%), with the number of shares being issued based on USA's stock price prior to closing, and with USA having the option to pay all cash. A closing is expected to occur shortly.

USA has controlling interests in Ticketmaster, Match.com, Citysearch, Expedia, Inc. and Hotels.com. In ad- dition to leveraging USA's online ex- pertise, Interval will be able to use USA's ticketing and local information services to create new benefits pro- grams for its members. USA's state- ment noted that its travel companies will be able to offer packages with re- sort inventory from Interval and its de- veloper clients.

In a statement, Barry Diller , USA Chairman and CEO, called the deal "another notch in our belt of interac- tive services with real revenues, earn- ings, and strong growth - one in which online migration over time is assured - and one where many of our current services interrelate, providing all kinds of new opportunities for each other."

USA Interactive paid $1.3 billion for a controlling stake in online travel company Expedia, Inc. last July and is in the midst of launching a new cable channel called USA Travel Channel.

For a number of years into the mid-1990s, Interval was owned by

CUC, a company with a large base of consumer discount membership pro- grams. When CUC merged with HFS (which owned RCI), a condition of the merger imposed by the U.S. Justice Department was that Interval be spun off as a separate entity. (TimeSharing Today had notified the Justice De- partment that the two ex- change companies did 98 percent of the exchanges.) The company was pur- chased from CUC by Willis Stein & Partners and other investers, including Marriott.

Diller, who once headed Holly- wood’s Paramount Studios and the Fox TV network, built his current company through the acquisition of Home Shop- ping Network. After HSN bought Ticketmaster and the USA and Sci-Fi Channels, the company was renamed USA Networks. A number of USA’s cable channels and film properties

were recently transferred to a joint venture with French conglomerate Viv- endi and Diller’s company was again renamed, to the current USA Interactive. The deal puts Interval back within a large corpo- ration with related busi- nesses. In commenting on the deal, Interval’s Chair- man and CEO, Craig Nash stated, "We are excited about the potential that le- veraging USA Intera- ctive's unique assets and distribution channels holds for the future of timeshar- ing and our company. As a strategic component of USA's transaction- based services, we will continue to complement our developer clients' business while adding even greater value to our consumer member fami- lies." USA is now seeking 100 percent ownership of Expedia, Inc, Ticket- master and Hotels.com.

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