Sabre Inc., a direct subsidiary of Sabre Holdings (NYSE:TSG), and
lastminute.com plc (LMC LN) today announced that they have reached
an agreement for Sabre to acquire lastminute.com. The addition of
lastminute.com, with its well-established consumer brands, is
expected to provide Sabre's Travelocity unit with greater scale and
the leading position in the growing European online travel
marketplace. The acquisition price of 165 pence per lastminute.com
share values lastminute.com's Diluted Share Capital at
approximately GBP577 million. The terms of the acquisition imply an
enterprise value for lastminute.com of approximately GBP606
million, including gross debt as at March 31, 2005, of
approximately GBP69 million and cash at bank and in hand as of
March 31, 2005, of approximately GBP40 million. The acquisition
will be made by Travelocity Europe Limited, an indirect subsidiary
of Sabre Holdings established for the purpose of the acquisition.
Sabre has obtained committed financing, arranged by Morgan Stanley
and Bear Stearns, which, together with its cash balances, is
sufficient to satisfy in full the cash consideration payable to
lastminute.com shareholders under the terms of the acquisition. The
proposed acquisition is expected to be neutral, post integration
costs, to Sabre Holdings' earnings per share in 2005 on an adjusted
basis (dilutive on a GAAP basis) and significantly accretive on an
adjusted basis in 2006 (dilutive on a GAAP basis). It is intended
that the acquisition will be implemented by way of a scheme of
arrangement under section 425 of the Companies Act (UK) (the
"Scheme"). It is expected that the Scheme Document will be mailed
to lastminute.com Shareholders on or before the end of May, 2005
and that, subject to the satisfaction, or, where relevant, waiver,
of all relevant conditions, the Scheme will become effective and
the acquisition completed by the end of July, 2005. The acquisition
price of 165 pence per lastminute.com share represents a premium of
approximately 57 percent over the closing middle-market price of
105 pence per lastminute.com share on May 10, 2005, being the last
business day prior to the announcement by lastminute.com confirming
it had received an approach which may or may not result in an offer
for the company. The acquisition price also represents a 47 percent
premium over lastminute.com's average share price for the 30 days
to May 10, 2005. "The anticipated acquisition of lastminute.com
directly supports Sabre's strategy of extending our role as a
travel retailer focusing on merchandising content, packages, and
growing our international points of sale, while broadening the
products and services we offer to all customers through our travel
distribution platform," said Sam Gilliland, chairman, president and
CEO of Sabre Holdings. "We're extremely pleased with the prospect
of having lastminute.com, with its highly-regarded brands and
well-established customer base, as a part of Travelocity, including
Travelocity Europe. We expect this combination would provide us
greater opportunity to profit from the fast-growing European online
segment. We look forward to working with lastminute.com's strong
team to create further value for our suppliers, our customers and
our shareholders." Following completion of the acquisition it is
intended that Brent Hoberman, currently CEO of lastminute.com, will
become CEO of the combined lastminute.com and Travelocity European
operations, reporting to Michelle Peluso, president and CEO of
Travelocity. Damon Tassone, currently president of Travelocity
Europe, will become Deputy CEO reporting to Brent Hoberman. Other
key lastminute.com and Travelocity management are expected to
continue as senior executives within the combined organization.
"Today's offer from Sabre is an endorsement of the achievements of
everyone at lastminute.com. Over the past seven years, we have
built a business from scratch into one of Europe's leading travel
and leisure groups, with over seven million customers and total
transactions worth GBP992 million for the financial year ended
September 30, 2004," said Brent Hoberman, CEO of lastminute.com,
which also announced its first half 2005 results today. "Today's
interim results are a further demonstration that the growth and
entrepreneurship at the heart of lastminute.com is continuing
strongly, with total transaction value of 57 percent for the first
half of 2005 and a doubling of our order book since the first
quarter of 2005. I am looking forward to the opportunity of running
the combined lastminute.com and Travelocity businesses in Europe."
According to Brian Collie, Chairman of lastminute.com, "The
lastminute.com Directors considered this offer from Sabre very
carefully. While we all acknowledge lastminute.com's future
prospects, we believe that this offer represents an excellent
opportunity to deliver significant, certain value to shareholders
now and to build an even stronger business for the future." "This
acquisition would bring together two well-regarded brands and two
great teams to create the leading position in European online
travel," said Michelle Peluso, president and CEO of Travelocity.
"Together we would have strong positions in the UK, France,
Germany, Italy, Scandinavia and Spain. lastminute.com's diverse mix
of flights, holidays, hotels, car hire, and non-travel, ties
closely with Travelocity's strategy of continuing to expand our
range of offerings to consumers, beyond basic air travel." Europe
is the world's largest leisure travel marketplace. In 2004, online
penetration reached nine percent, but it is expected to more than
double to 20 percent by the end of 2006. After closing of the
acquisition, Travelocity will evaluate its brands
country-by-country with the intention of positioning lastminute.com
as the lead brand in most countries in which it operates.
Travelocity would likely operate multiple brands in Europe to
maintain the broadest possible online presence. Sabre has
identified a number of areas for cost savings and revenue synergies
to Travelocity. Areas of opportunity include streamlining marketing
spending across brands, centralizing operations and administrative
functions, consolidating platforms, and sharing technologies and
supplier relationships. Approval of the acquisition will be sought
from lastminute.com Shareholders at a court meeting and an
extraordinary general meeting (EGM). In order to become effective,
the Scheme must be approved by a majority in number representing
three-fourths in value of the lastminute.com Shares that are voted
at the Court meeting. In addition, special resolutions implementing
the Scheme, sanctioning the related reduction of capital and
approving the alteration of lastminute.com's articles of
association must be passed by lastminute.com Shareholders
representing 75 percent of the votes cast at the EGM.
Implementation of the Scheme will also require the sanction of the
Scheme by the Court. The lastminute.com Board, which has been
advised by Merrill Lynch and UBS, considers the terms of the
acquisition to be fair and reasonable. In providing advice to the
lastminute.com Board, Merrill Lynch and UBS have taken account of
the commercial assessments of the lastminute.com Board. The
lastminute.com Board intends unanimously to recommend that
lastminute.com Shareholders vote in favor of the resolutions to be
proposed at the Court Meeting and the Extraordinary General Meeting
(EGM), as they have irrevocably undertaken to do in respect of
their own beneficial holdings of lastminute.com shares
(representing, in aggregate taken together with the holdings of
their related trusts and close family members, approximately 7.2
percent of the existing issued share capital of lastminute.com).
"Diluted Share Capital" This means the total number of issued
shares of lastminute.com plus the number of shares underlying
options of lastminute.com which have exercise prices of 165 pence
which The acquisition value of GBP577 million for the Diluted Share
Capital has been calculated as follows: 165 pence multiplied by the
total number of lastminute.com shares in issue plus the number of
lastminute.com shares underlying options with exercise prices of
165 pence or less minus the weighted average exercise price of such
options multiplied by the number of those options. Notice of
Webcast Sabre Holdings plans to hold a Webcast at 9:00 am EDT to
discuss the announcement, but there will be no Q&A. To access
the Webcast, please log on to the following address:
www.sabre-holdings.com/investor/ About lastminute.com
lastminute.com, Europe's leading independent online travel and
leisure group, operates directly in fourteen European countries and
participates in three international joint ventures, providing
travel and leisure inspirations and solutions to customers. At 31
March 2005 lastminute.com had over 10 million subscribers to its
weekly newsletter. The business is based on the idea of matching
supply and demand. lastminute.com offers consumers opportunities to
acquire airline tickets, hotel rooms, holidays (both self packaged
and third party packages), car hire, entertainment tickets,
restaurant reservations and food delivery, speciality services,
gifts and auctions. Having completed 14 acquisitions in the past
three years, lastminute.com now owns and operates online brands
including holidayautos.com, travelprice.com, degriftour.com,
travelselect.com, travel4less.co.uk, eXhilaration.co.uk,
medhotels.com, first-option.co.uk, gemstonetravel.com,
onlinetravel.com and lastminute.de. lastminute.com seeks to
differentiate itself by packaging and delivering products and
services, such as restaurant reservations, entertainment tickets
and gifts, in convenient, novel and distinctive ways. The company
has been successful in developing a distinctive and widely
recognised brand, which is intended to communicate spontaneity and
a sense of adventure to a youthful target demographic.
lastminute.com was founded by Brent Hoberman and Martha Lane Fox in
1998. Brent Hoberman remains as CEO of the company which currently
employs approximately 2,000 people throughout Europe. For the year
ended 30 September 2004, lastminute.com reported total transaction
value ("TTV"), pre-exceptional EBITDA and profit (loss) before tax
of GBP992.3 million, GBP24.1 million and GBP4.3 million,
respectively. Pro forma TTV was GBP1,099 million. Consolidated net
assets as at 30 September 2004 were GBP95.2 million, including cash
at bank and in hand of GBP85.9 million. About Sabre Holdings Sabre
Holdings is a world leader in travel commerce, marketing travel
products and providing distribution and technology solutions for
the travel industry. Sabre Holdings operates in multiple travel
distribution channels: the travel agency channel, the
consumer-direct channel and the business-direct channel. Through
the Sabre(R) global distribution system, subscribers can access
information about, and can book reservations for, among other
things, airline trips, hotel stays, car rentals, cruises and tour
packages. The Sabre Travel Network(TM) business operates the global
distribution system and markets and distributes travel-related
products and services through the travel agency channel. Sabre
Holdings' engages in consumer-direct and business-direct travel
marketing and distribution through its Travelocity(R) business (see
below). In addition, the Sabre Airline Solutions(TM) business is a
leading provider of technology and services, including development
and consulting services, to airlines and other travel providers.
About Travelocity With millions of registered users and booking
$4.9 billion of travel in 2004, the Travelocity segment markets and
distributes travel-related products and services directly to
individuals, including leisure travelers and business travelers,
through Travelocity websites and contact centers, and websites
owned by its supplier and distribution partners. Travelocity
customers can access offerings, pricing and information about
airlines, hotels, car rental companies, cruise lines, vacation and
last-minute travel packages and other travel-related services. For
business travelers, the Travelocity Business(SM) online corporate
travel agency provides the integrated online corporate travel
technology and full-service offering of our GetThere(R) product
along with the online expertise of Travelocity. Cautionary Notice
Statements in this disclosure which are not purely historical facts
or which necessarily depend upon future events, including
statements about the anticipated benefits of the proposed
transaction to Sabre Holdings Corporation (including the expected
synergies or the forecasted effects of the transaction on the
financial performance of the company) or other statements about
anticipations, beliefs, expectations, hopes, intentions or
strategies for the future, may be forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended. Readers are cautioned not to place undue reliance on
forward-looking statements. All forward-looking statements are
based upon information available to Sabre Holdings Corporation on
the date this report was submitted. Sabre Holdings Corporation
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Any forward-looking statements involve
risks and uncertainties that could cause actual events or results
to differ materially from the events or results described in the
forward-looking statements, including risks or uncertainties
inherent in the Scheme of Arrangement procedure, in the integration
of the acquired business (such as ensuring the effectiveness of the
design and operation of the internal and disclosure controls of the
business to be acquired), in securing long-term financing for the
proposed transaction, or in competition within the European
marketplace from established or emerging competitors. Sabre
Holdings Corporation may not succeed in addressing these and other
risks. Further information regarding factors that could affect our
financial and other results can be found in the risk factors
section of Sabre Holdings Corporation's most recent filing on Form
10-Q with the Securities and Exchange Commission.
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