MENU Holdings Limited is travelling higher on takeover news: Is there time to buy?

Shares in online accommodation and air travel bookings company Holdings Limited (ASX: WTF) have climbed more than 6% to $3.29 in mid-afternoon trade.

The Australian Competition and Consumer Commission (ACCC) today announced it will not oppose the proposed acquisition by Expedia Inc of Wotif. The takeover remains subject to the final approval of shareholders at a scheme meeting to be held 9 October. If all approvals are received the transaction is expected to close in late October 2014.

Some accommodation and travel providers felt that Wotif’s removal from the Australian market would make the travel bookings market less competitive and allow rivals like Webjet Limited (ASX: WEB) to charge higher commission rates by virtue of their greater pricing power. However, the ACCC decided the online travel booking market was sufficiently competitive with many other operators like Flight Centre Travel Group Ltd (ASX: FLT) also playing a role.

Once rated a growth stock Wotif has disappointed in recent times and saw net profit drop 15% in the most recent financial year. With this in mind shareholders will most likely be happy to take the $3.06 per share being offered by Expedia alongside a special fully franked dividend of 24 cents per share. Shareholders who can capture the additional benefit of the full franking credit will effectively be receiving an additional 10 cents per share.

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Motley Fool contributor Tom Richardson owns shares in Webjet and Flight Centre. You can find him on Twitter @tommyr345

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