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Vacationspot.Com & Rent-a-Holiday

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Vacationspot.Com & Rent-a-Holiday

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  • October 2008
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Introduction

VacationSpot.com and Rent-a-Holiday were both on-line travel companies that focused on the independent leisure lodging segment of the travel market. VacationSpot.com company comes from Seattle, Washington while Rent-a-holiday comes from other side of western world Brussels, Belgium. Both companies started at around same time and in April 1999 they entered formal merge negotiations.

In march of 1998 the CEO and president of VacationSpot.com Murch was contacted by the CEO of Rent-a-holiday Coppieters. Later Murch offered his partner the merge. First Coppieters did not want to hear anything about it but in April 1999 he and his partner Ingelbrecht sat on the plane to Seattle to talk about the merge. The discussion was very worth, both companies felt like they belong to each other and they have a lot to offer to the other side and much to earn from this merge. The talks lasted for two days. The first day was mostly about companies policies, strategies and the reasons why these companies should merge. Everything looked well until the price of the contract was said. Price of the merge was presented by the VacationSpot.com representatives at 9:1 ratio which means that VacationSpot.com would pay $ 27 million and Rent-a-Holiday would take part in the merge with $ 2 – 3 million. Rent-a-Holiday executives were also offered a long term employment contract in the merge.

After this price was presented the executives of Rent-a-Holiday walked out in anger saying that these talks was nothing more then wasting of their time.

The main problem was about the price ratio of the merge. Rent-a-Holiday executives felt like their company was lower-priced. According to their position in the market they expected to receive more valuable offer. The company from their point of view as they both were the founders of Rent-a-Holiday deserved more then 9:1 ratio. They also took this offer very personally expecting that Rent-a-Holiday should play stronger part in this...