Sabre Holdings Corporation announced today that it intends to make a cash tender offer for all of the outstanding publicly-held common shares of Travelocity.com that Sabre does not own. Sabre currently has an approximately 70% ownership stake in Travelocity.
Sabre intends to offer $23.00 per share to acquire the balance of Travelocity`s common stock (approximately 15 million shares), representing a 19.8 percent premium over the closing price of $19.20 on Friday, February 15 2002. Sabre`s proposed offer price compares with Travelocity`s trailing 30- and 60-day average closing prices of $22.31 and $24.30, respectively. The tender offer will not be conditioned on Sabre obtaining any financing. Separately, Sabre may in the future consider capital raising opportunities, including equity or equity-related securities. The tender offer will be conditioned on the tender of a number of shares sufficient to bring Sabre`s ownership interest in Travelocity common stock to over 90% (assuming conversion of Sabre`s Class A common stock). Sabre anticipates acquiring any shares not purchased in the tender offer through a “short-form” merger at the same cash price per share as the tender offer.
The company expects to commence the tender offer on or soon after March 5 and estimates that the proposed transaction will be neutral to its 2002 earnings. The company determined that the long-term strategies of Sabre and Travelocity are converging. The move supports Sabre`s continuing strategy to deliver value to suppliers and travelers across multiple distribution channels. Sabre believes it makes sense to combine the strengths of both companies to pursue new revenue opportunities, while optimizing investment decisions across companies. Once the purchase is completed, Travelocity would become a wholly owned Sabre company. Sabre does not plan to change Travelocity`s executive team, strategic direction or brand.
In response to this action by Sabre, the Travelocity Board of Directors has formed a special committee comprised of independent and outside directors to review and evaluate Travelocity`s options and make recommendations to the Board. The committee met Monday night and appointed Salomon Smith Barney as its financial advisor and Locke Liddell & Sapp LLP as its legal counsel to assist the committee in its review and evaluation.
Investors, Travelocity stockholders, and other interested parties are urged to read the tender offer documents that will be filed with the Securities and Exchange Commission by Sabre because they will contain important information.