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USA drops Expedia, bids

USA Interactive calls off plans to assume control of the two Web sites but will go forward with its decision to merge with Ticketmaster.

USA Interactive has called off plans to assume control of Expedia and but will go forward with its decision to merge with Ticketmaster.

In June, USA Interactive launched a $4.5 billion bid to acquire the shares of Ticketmaster, Expedia and that it didn't already own. It backed off the offer a few days later, citing market reaction.

Travel site Expedia said in July that it didn't need the USA Interactive investment, adding that the offer was hurting its stock price.

USA Interactive said its goal was to simplify and consolidate its various units, noting it is taking a "productive step in that direction" by bringing Ticketmaster, and Citysearch within the USA Interactive fold.

A deal announced Thursday calls for Ticketmaster shareholders to receive 0.935 shares of USA Interactive stock for each share of Ticketmaster. That values Ticketmaster's shares at about $15.17 each and the total deal at about $684 million. Ticketmaster's stock closed at $12.60 on Wednesday.

"While we would have liked to reach the same result with Expedia and, and have had collegial and positive discussions with each of the special committees, we are convinced no transaction will be consummated at this time," USA Interactive CEO Barry Diller said in a statement.

USA Interactive put its focus on e-commerce last year, after the company sold its entertainment unit--which included a cable network, the Sci-Fi Channel, a film company and TV production unit--to Vivendi Universal in a $10.3 billion deal. USA Interactive currently owns shares of Expedia, and Ticketmaster, as well as Precision Response, HSN, Electronic Commerce Solutions and

Diller said he plans to name executives to head the company's travel, information and services and electronic retailing businesses. He will also "provide for closer coordination and cooperation between them" to allow those businesses to "grow dramatically without being impeded by a less-than-cohesive ownership structure."