Expedia Inc. said on Tuesday that it would spend as much as $3.5 billion to buy back more than a third of the online travel company's shares at a premium of at least 8 percent to Monday's closing price.

The news sent Expedia shares up $3.50 or 13.7 percent in premarket dealings to $29.

Without elaborating on the reasons for the buyback or the source of funds to be used, Chairman Barry Diller said the move reflected the board's confidence in the company's future.

Expedia said its directors, executive officers, and Liberty Media Holding Corp. do not intend to sell shares in the stock repurchase plan.

Liberty Media holds 15.7 percent of Expedia, while Diller holds 2 percent, according to Reuters data.

Based on the share count at the end of the first quarter, the planned buyback of 116.7 million shares would represent 36 percent of the diluted share count of 323.7 million.

The buyback would be conducted under a tender offer that is set to begin next week and expire the week of August 6, Expedia said.

The online travel company said it would pay between $27.50 and $30 per share. The range represents a premium of between 8 percent and 18 percent, compared with its Monday closing price of $25.50.

The tender offer would allow stockholders to indicate how many shares and at what price within the company's range they wished to tender. The company would then determine the lowest price at which it could purchase the 116.7 million shares.