Giving in to the realities of the stock market’s pricing, Sabre Holdings
Corp. raised its tender offer for the outstanding shares of online travel
operation Travelocity.com Inc. from $23 to $28, and this time, Travelocity
Sabre said it has also entered into an agreement in principle with plaintiffs
to settle all pending shareholder litigation over the deal, subject to court
Fort Worth, Texas-based travel services company Sabre
actually founded Travelocity
and then sold a chunk of its
an unsolicited bid in mid-February to acquire the Travelocity shares that
it doesn’t already own for $23 a share.
Sabre currently owns approximately 70 percent of Travelocity’s stock. But the
price on the open market kept climbing and closed last Friday at $26.90 a
share. Naturally Travelocity shareholders were less than thrilled with a $23
offer and the company was hit by a variety of shareholder lawsuits.
The matter nearly became a hostile takeover bid as Travelocity’s board called
the offer “an opportunistic attempt to acquire Travelocity at a time when its
stock price is temporarily depressed…” The board hired outside advisers to
help fed off the move from Sabre.
Now, however, Travelocity’s board of directors has recommended that
stockholders accept Sabre’s amended offer.
The big travel reservation company said it has “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 has said it wants to combine the strengths of both companies to pursue
new revenue opportunities, while optimizing investment decisions. Travelocity
would become a wholly owned Sabre company. Sabre does not plan to change
Travelocity’s executive team, strategic direction or brand.
Travelocity, also based in Fort Worth, posted pro forma income of 9 cents per
share for its fourth quarter on gross travel bookings of $630.2 million.
Travelocity began trading on Nasdaq in March 2000 after completion of its
merger with Preview Travel. It was launched by Sabre in 1996.