As of Thursday, OpenTable's shares were trading at about 33.5 times 12-month estimated forward earnings, far below the 498.7 times of competitor Yelp, according to Thomson Reuters StarMine.
"I think (the deal) creates urgency for larger players to acquire the leading local platforms," Telsey Advisory Group analyst James Cakmak told Reuters.
The deal is expected to close in the third quarter.
OpenTable, which is facing increasing competition from Yelp and others, posted its first quarterly loss in five years for the period ended March 31 as it spent more on marketing to stem the slowdown in the number of restaurants signing up for its services.
Watch: Why Jim Cramer likes Priceline
The number of North American restaurants using OpenTable's platform rose 19 percent to 23,862 in the quarter, but growth was slower than in the previous two quarters.
The number of restaurants using its service outside the United States fell.
OpenTable, which gets $1.00 from a restaurant if a diner reserves a table through its website or app, will continue to operate as an independent business led by its current management, Priceline said.
Up to Thursday's close, OpenTable's stock had fallen about 11 percent this year.
Yelp's shares rose 13.3 percent to $74.65 in early trading, having fallen 5 percent this year to Thursday's close. (Click here for the latest quote.)