It has been over two months since Tripadvisor formed an independent committee to explore the possibility of a sale, with no updates from controlling shareholder Liberty Tripadvisor Holdings or Tripadvisor itself. However, this silence may be broken when both companies report their quarterly results on May 8. Private equity firm Apollo Global Management is still interested in acquiring Tripadvisor, along with other potential suitors, according to sources. The sale process includes various scenarios, such as acquiring Tripadvisor and spinning off its Viator tours and activities brand, or keeping the company intact. A committee of independent directors has been tasked with evaluating any offers.
A key factor influencing the decision-making process is Liberty Tripadvisor’s obligation to redeem $330 million of Series A preferred stock for cash by late March 2025. This obligation stems from a preferred stock investment made by private equity firm Certares in Liberty Tripadvisor in March 2020 during the Covid-19 pandemic. How Liberty Tripadvisor will handle this redemption before or in March 2025 is a question of interest, with options including issuing Liberty TripAdvisor stock or reaching a merger deal with Tripadvisor that could result in the retirement or assumption of the preferred stock on tax-efficient terms. Investors have varying opinions on how much this deadline will impact negotiations, with some believing Liberty Tripadvisor is in a weak bargaining position due to the deadline, while others think the company has resources and options to handle the redemption.
The sale of Tripadvisor and potential spin-off of its Viator brand are of great interest in the industry, with multiple parties showing interest in acquiring the company. The formation of an independent committee to evaluate offers indicates that the process is moving forward, with various scenarios being considered for the future of Tripadvisor. The upcoming quarterly results from Liberty Tripadvisor Holdings and Tripadvisor may shed light on any developments in the sale process. The involvement of Apollo Global Management as a suitor, along with other interested parties, adds to the complexity of the potential sale and underscores the significance of the decision for both companies.
The implications of the March 2025 deadline for Liberty Tripadvisor to redeem its preferred stock further complicate the sale process. How the company chooses to address this obligation could impact the negotiations and potential outcomes of a sale. Liberty Tripadvisor’s financial standing and options to refinance or redeem the preferred stock will play a significant role in shaping the future of the company and its potential sale to interested buyers. The involvement of private equity firms and other parties in the sale process highlights the attractiveness of Tripadvisor as a potential acquisition target.
Overall, the ongoing sale process for Tripadvisor involves a range of moving pieces, including the involvement of private equity firms, the potential spin-off of the Viator brand, and the looming deadline for Liberty Tripadvisor to redeem its preferred stock. The upcoming quarterly results scheduled for May 8 will provide insight into any developments in the sale process and the future direction of Tripadvisor. The differing opinions among investors on the impact of the March 2025 deadline on negotiations further highlight the complexity and uncertainty surrounding the potential sale of Tripadvisor. Ultimately, the decisions made by Liberty Tripadvisor and potential buyers will shape the future of the company and determine its path forward in the industry.
