[Credit: Tripadvisor]

Tripadvisor forms committee to review potential sale

US: Online travel agency Tripadvisor has announced that it has formed a special committee to explore proposals for a potential sale of the company to Liberty TripAdvisor, an entity created in 2014 upon the spin off of Tripadvisor from Liberty Interactive, which already owns a 21 per cent stake controlling stake in the travel reviews site.

In a company statement, Tripadvisor said that the committee of independent directors from its board would be able to “evaluate any proposals that may be brought forward for a potential transaction in response to a recent Liberty TripAdvisor Holding disclosure of its intent to evaluate potential alternatives involving LTRP and Tripadvisor”.

The announcement led to a 14.2 per cent rise in Tripadvisor shares over extended trading hours on Monday.

Centerview Partners will now act as a financial adviser to the special committee to oversee the proposals of potential alternatives for Tripadvisor and Liberty TripAdvisor.

Liberty TripAdvisor currently has a debt of $2.75 billion vs a market cap of $89 million, according to AB Bernstein managing director and analyst, Richard Clarke, who said that it would “likely need to tap Tripadvisor’s balance sheet in some way to repay this debt”.

He added in a flash report that “no terms have been disclosed as to the potential purchase price nor is it clear how Liberty intends to finance the transaction at this stage”.

In a busy week for the company, Tripadvisor is due to publish its fourth quarter and full-year earnings after market close on 14 February [Wednesday]. Its call with analysts is scheduled for a day later on 15 February, before Liberty TripAdvisor hosts its earnings call on Friday [16 February], when more information may well come to light.

Tripadvisor sets out to help travellers plan and book their trips, where to stay, what to do and where to eat based on guidance from consumers who have been there before. The travel guidance firm now has more than one billion reviews on its site and is available in 43 markets and 22 languages worldwide.

Subsidiaries of Tripadvisor own and operate a portfolio of travel media brands and businesses, including vacation rental brands FlipKey and VacationHomeRentals [US], Holiday Lettings [UK] and Niumba [Spain], as well as Viator, Bókun, Cruise Critic, TheFork, Reco, Jetsetter, SeatGuru and SinglePlatform.

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