Tripadvisor on Monday announced it has formed a special committee and retained an advisor “to evaluate any proposals that may be brought forward for a potential transaction.”
The move comes after Liberty Tripadvisor Holdings, an Englewood, Colorado-based company that has held a controlling interest in Tripadvisor since that company’s initial public offering in December 2011, announced in an SEC filing that on February 9 its board gave approval to “engage in discussions with respect to a potential transaction.”
Liberty Tripadvisor holds a 57% voting interest in Tripadvisor, though it holds barely more than 20% stake in that company’s shares.
BTIG managing director and digital services analyst Jake
Fuller wrote in a bulletin that Tripadvisor’s news release, considered along
with its 8-K filing and the 13D filing from Liberty Tripadvisor “have created
some confusion around what is going on,” but Fuller said it sounds like Liberty has
received an offer from a potential buyer to acquire both Liberty and
Tripadvisor for cash, taking Tripadvisor private.
Wrote Fuller, “We have no idea who might have made the offer
or what that offer looks like beyond that it would be all cash for both LTRPA
and TRIP. That said, LTRPA/TRIP likely wouldn’t have gotten board approval to
engage, formed a special committee and retained an advisor if an offer weren’t
credible. We have not seen any press reports yet pointing to a potential buyer.”
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Private equity is the most likely buyer of Tripadvisor, according to reports from stock market analysis website Seeking Alpha, which quoted Wells Fargo analyst Brian Fitzgerald.
"We think that most likely interest would come from a PE fund that likes the combination of assets in the portfolio and has a plan for maximizing their values, especially that of Viator and TheFork," Fitzgerald told Seeking Alpha, adding that he thought the company might get an offer of over $25 a share from a private equity buyer.
The website also quoted Cowen analyst Kevin Kopelman as saying he doesn't expect major online travel agencies like Booking Holdings, Airbnb, Expedia or Trip.com to be potential buyers due to regulatory issues.
Creating a committee of independent directors is done to protect the interests of the company while avoiding any conflicts of interest. It is generally formed to act on specific issues, such as negotiating and approving, or rejecting, a sale or change of control transaction.
Tripadvisor’s announcement stated there can be no assurance that a transaction will occur.
“Any potential transaction would be subject to, among other things, the negotiation and execution of mutually acceptable definitive transaction documents and the approval of the board, including the approval of the special committee,” the statement said.
The company added that it does not intend to disclose developments on the matter until the special committee and board determine it’s appropriate or necessary or is required by law or regulatory requirements.
In March 2020 Liberty Tripadvisor Holdings landed a $325 million investment from Certares Management, whose founder and senior managing director Greg O'Hara sits on the Tripadvisor board.
Tripadvisor will report its fourth quarter and full-year 2023 financial report after market close Wednesday, and its call with analysts is Thursday morning. Liberty Tripadvisor is scheduled to host its earnings call Friday at 11 a.m. EST.
This is a developing story and will be updated as more information becomes available.