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January 10, 2007

Give It Up, Already, U.S. Airways

I thought I was still dreaming when I heard my radio announce this morning yet another US Airways bid on Delta. But sure enough, US Airways has raised its offer: Delta’s unsecured creditors would receive $5.0 billion in cash and 89.5 million shares of US Airways stock. That’s an offer valued at $12.7 to $15.4 billion.

US Airway’s justification? “While our original proposal offered substantially more value to Delta’s unsecured creditors than the Delta stand-alone plan, we are making this revised offer to eliminate any doubt that a merger with US Airways offers Delta’s unsecured creditors significantly more value,” said US Airways Chairman and CEO, Doug Parker, in a statement today.

My take: Give Delta some breathing room! This back-and-forth is like a pathetic dating chase veering on the edge of stalking. Not only has Delta indicated in detail why it believes US. Airways is a particularly bad match, but the carrier has also made it clear that it wants to pull out of bankruptcy in solo status.

Wake up, US Airways: You may be killing your hopes of any merger with Delta if you continue to persist so aggressively. Words like “hostile takeover bid” and “unsolicited merger proposal” are not kind ones.

I also couldn’t help but chuckle when I read that US Airways put a Feb. 1 deadline on its unsolicited offer. “It is time for this process to move forward,” Parker said. As if US Airways is waiting on Delta to make up its mind or something.

Or maybe Delta is just playing a really superb game of hard-to-get!

--Lindsey Rushmore, Editor-In-Chief, Travel Distribution Report

Posted by TDR at 03:24 PM | | Comments (1)

December 12, 2006

Sabre Goes Private In $5 Billion Transaction

Sabre Holdings wasted no time announcing its buyout after the rumor mill ran rampant yesterday with predictions that it was up for sale.

The company announced today that is has inked an agreement with Silver Lake Partners and TPG, both of which will acquire it for $32.75 per share in cash. The full transaction “is valued at approximately $5 billion, including the assumption of approximately $550 million in net debt,” according to a press release.

“As a publicly held company, Sabre has had to focus on running its business while at the same time satisfying Wall Street expectations,” said Henry Harteveldt, VP and principal analyst of travel research for Forrester Research, in a press statement yesteday. “That may actually have hampered Sabre’s ability to invest in its technology platforms, business units, or acquire companies.”

And it sounds like Sabre’s buyers will be investing their own dollars in the company’s technology platforms. Sabre Holdings’ “leadership position in travel technology” made the investment an “exciting” one, according to TPG Partner, Karl Peterson. And he believes that Sabre is “well positioned to continue innovating.” In addition, he believes that Sabre’s “strength of Travelocity and its other online brands,” make the company a good investment.

Sabre Holdings does not anticipate executive management team changes and plans to keep its corporate headquarters in Southlake, Texas, according to the release. A definitive merger agreement is subject to customary closing conditions, including receipt of stockholder and regulatory approval, but closing of the transaction is expected to occur early in Q2 of 2007.

Posted by TDR at 04:01 PM | | Comments (4)

December 07, 2006

Travelport Welcomes Worldspan To Its Family

Those in the travel community who were sure that Worldspan was a ticking time bomb were right -- especially after Travelport CEO Jeff Clarke’s eye-turning comment at the PhoCusWright Executive Conference that GDS consolidation is “inevitable” and that “there is no economic reason to have four GDSs.”

Not one month later, Clarke’s words rang true today as Travelport released its groundbreaking announcement that it will acquire Worldspan.

As part of its acquisition strategy, the travel conglomerate, which owns Orbitz, Cheaptickets and the Galileo GDS, plans to merge its GDS with Worldpan’s. Travelport contends that this GDS combination is rife with opportunity. Currently, more than 750 travel suppliers and 63,000 travel agencies rely on the two GDSs’ travel distribution services, according to a press release.

Technology is another asset Worlspan will bring to Travelport, particularly in the online distribution segment, Travelport said. Management sees opportunity in cross-selling Worldspan’s technology products to Travelport’s global customer base.

As far as overall technology integration of the two companies, Travelport believes that “consolidating technology and administrative operations,” will result in “near-term cost savings of approximately $50 million.”

The new GDS will also stand stronger against the increasing competition of alternative distribution channels and the supplier-direct channel that’s making a mark for itself these days, according to Travelport, citing Forrester Research’s data that says more than half of US travel bookings are already processed through alternative non-GDS channels and that globally, sales from supplier direct websites are expected to continue to grow -- especially as airlines encourage direct bookings through frequent flyer programs, exclusive fares and potentially through removal of content from the GDSs.

Jeff Clarke will lead the combined company as CEO, and Rakesh Gangwal will continue to lead Worldspan the completion of the merger.

Transaction details: Travelport’s proposal values Worldspan at $1.4 billion. Simultaneously with the execution of the merger agreement, Worldspan completed a recapitalization plan, in which Travelport loaned $125 million to Worldspan in exchange for a payment in kind (PIK) note, which Travelport funded through cash on hand. In addition, one of Travelport’s parent companies also loaned Worldspan $125 million in exchange for a PIK note.

-- Lindsey Rushmore, Editor-In-Chief, Travel Distribution Report>

Posted by TDR at 03:58 PM | | Comments (0)

November 21, 2006

Expedia Corporate Travel Makes Stronger European Presence

The German corporate travel market will soon have a taste of Expedia. That’s because Expedia Corporate Travel (ECT) plans to acquire MTM Reisen, a corporate travel provider that serves the German market.

ECT announced Nov. 15 its agreement with MTM Reisen, which marks ECT’s fourth European acquisition, following the launch of offices in the UK, France and Belgium.

ECT plans to continue expanding in the European market, but notes the importance of knowing that market well. “MTM Reisen’s local market knowledge and service expertise combined with Expedia’s award-winning technology will enable us to better serve travelers in a country that represents one of the largest corporate travel markets in Europe,” said Jean-Pierre Remy, ECT president.

Headquartered in Munich, Germany, MTM Reisen has both German and international clients. Under the terms of the acquisition ECT expects the majority of MTM Reisen’s employees to join Expedia Corporate Travel Germany, including company founder Helmut Rainalter, the release explained.

Neither company disclosed the terms of the transaction, which is expected to close in December.

Posted by TDR at 03:41 PM | | Comments (280)

November 17, 2006

Delta Makes No Haste With U.S. Airways Offer

Spectators are still waiting in earnest to see what Delta Air Lines will say after U.S. Airway’s bold proposal to merge with the carrier early Wednesday morning.

“We received a letter from U.S. Airways this morning and will of course review it,” acknowledged Delta Airlines CEO Gerald Grinstein on Nov. 15. But the carrier seems hesitant to jump at the offer as its plan “has always been to emerge from bankruptcy in the first half of 2007 as a strong, stand-alone carrier,” Grinstein said.

However, Delta has not yet made public a definite “no” –- and perhaps for some reason. According to the U.S. Airways proposal, pairing up with Delta “would create one of the world’s largest airlines.” The “New” Delta would be the number one trans-Atlantic airline and second largest airline in the Caribbean. In addition, the carrier would still operate under the Delta name and would be “uniquely positioned to compete with low cost and legacy carriers.”

In a letter to Grinstein, U.S. Airways proposes that “Delta prepetition unsecured creditors would receive $4.0 billion in cash plus $78.5 million shares of U.S. Airways common stock.” The equity component represents a value of approximately $4.0 billion based on the closing price of U.S. Airways’ common stock on Nov. 14. “As a result of this transaction, immediately following the merger, Delta unsecured creditors would own approximately 45 percent of the combined company,” the letter stated.

Posted by TDR at 06:04 PM | | Comments (0)

October 31, 2006

SideStep Bolsters Community Strategy With TravelPost

Travel search company SideStep, Inc. is hot on the popularity of consumer-generated content in the travel industry, and it’s wasting no time to incorporate the idea into its assets.

SideStep announced Oct. 31 it completed the acquisition of TravelPost.com, “the largest independently owned site for hotel reviews and ratings,” according to a press release.

The deal couples TravelPost’s lodging content with SideStep.com’s access to online travel search information. The addition of TravelPost’s content, including nearly 500,000 reviews, photos and blogs, will create “an even more powerful online travel experience” for SideStep’s visitors, the release said.

TravelPost.com’s hotel reviews offer a filtering feature that allows travelers to segment reviews by age, gender, purpose of stay and travel budget. The reviews are then integrated with a travel blogging community where travelers can write about their experiences, post photos from their trips and keep track of where they’ve traveled on an interactive world map.

SideStep will integrate TravelPost.com’s travel planning content into site over the coming months.


Posted by TDR at 02:42 PM | | Comments (599)

August 25, 2006

Blackstone Speedily Closes Sale Of Travelport

In less than 60 days since the first announcement, The Blackstone Group has completed its acquisition of Travelport.

Travelport, a subsidiary of Cendant Corporation, went to the private equity firm for $4.3 billion in cash, subject to closing adjustments. This transaction represents Blackstone’s largest equity investment in the technology sector to date, according to a Travelport press release.

Travelport offers business and consumer services, from distribution technology and travel packaging to retail sales and solutions. The company operates over 20 brands, including online travel agency Orbitz, global travel content wholesaler GTA and GDS Galileo International.

Blackstone has agreed to sell 14 percent of the new entity to Technology Crossover Ventures (TCV) on completion.

“Clearly, the travel industry is driven by the winds of consumer demographics and rapidly growing new markets such as China and India,” said Blackstone’s Senior Managing Director, Chip Schorr. “In this context, we expect Travelport’s widely recognized brands, global reach, local expertise and world-class management team will continue to bolster our view of Travelport as the most relevant company in the travel space.”


Posted by TDR at 10:44 AM | | Comments (0)

August 18, 2006

TravelCom Embraces Res-Expo

The Travel Industry Association (TIA) has merged two well-known industry conferences into one.

Res-Expo, a technology and tactical conference, will now be part of TravelCom, an e-commerce and online marketing conference and exposition, according to an Aug. 14 release.

The move highlights TIA’s goal of “becoming the source for information on travel distribution and marketing,” stated TIA’s COO Mike Pusateri. The combination of the two events “provides the conduit to address head-on the historic shifts taking place in the travel industry by providing strategic insight along with useable knowledge and solutions,” he added.

The newly merged show will make its debut at TravelCom 2007 April 4-6 in Las Vegas.

Posted by TDR at 02:01 PM | | Comments (0)