Global travel booking giant Expedia has launched a $700 million takeover bid for Australia’s Wotif.com.

Under the deal, Expedia Group will pay $3.06 per share to acquire all Wotif.com Holdings shares and shareholders will also receive a special dividend of 24 cents per security.

The total $3.30 payment is a 31 per cent premium on the average trading price for Wotif.com shares over the past five days and the company has recommended shareholders accept the offer.

Company founders Graeme Wood and Andrew Bice have agreed to sell their shares to Expedia.

Wood holds around 20 per cent of shares in the company while Mr Bice owns around 15.5 per.

Wotif.com Holdings has entered into a Scheme of Implementation agreement with the US company.

Wotif chairman Dick McIlwain, said the sale was the best way to maximise shareholder value.

“As a board, we have carefully assessed the changing dynamics of the markets in which we operate, and the uncertainties and risks that we would face if we were to continue as an independent company,” he said in a statement on Monday.

“With that in mind, we believe that shareholder value will be maximised and that Wotif Group will be best positioned for the future, through the proposed transaction.”

McIlwain said Expedia would be able to leverage Wotif.com’s brand in an increasingly global travel market.

The takeover offer comes as Wotif struggles with falling profitability, with the company on Monday announcing it expects to post a net profit of around $43 million for the 2013/14 financial year.

That’s down from $51 million in 2012/13 and $58 million the year before. The company has blamed the high Aussie dollar, which has led to more people holidaying overseas, and strong competition for its declining fortunes.

Shares in Wotif.com Holdings, which have been placed in a trading halt until 1100 AEST on Monday, last traded at $2.64.

AAP