Priceline takes $500m bond stake in Ctrip

Priceline Group Inc, the world's second-largest online travel company by gross bookings based in the US, announced on Thursday it is investing $500 million in Ctrip.com International Ltd.

The investment will be made through a convertible bond, and Ctrip, the largest online travel agency in China, has granted Priceline Group permission to acquire shares in the open market over the next 12 months.

Combined with the acquisition, and with shares convertible under the bond, Priceline may hold up to 10 percent of Ctrip's outstanding shares, according to the two sides' commercial agreement.