By Maxine Shapiro, KERA 90.1 commentator.
Dallas, TX – There is a bit of hostility brewing in the Metroplex between Sabre Holding and Travelocity.com. And it's only just begun. I'm Maxine Shapiro with KERA Marketplace Middays.
Southlake-based Sabre Holdings Corporation, the leading provider of technology, distribution and marketing services for the travel industry, is now looking to buy out the remaining shares of Fort Worth-based travelocity.com. Presently Sabre holds 70% percent of Travelocity.com. They'd like the other 30%. But Sabre is getting greedy. Sabre is willing to buy the outstanding shares from Travelocity stockholders for $23 per share. This is not a good deal. See, Wall Street really likes Travelocity.com. Today, the stock is trading at about $26. Analysts have a current target price of about six dollars higher than that. The average recommendation is buy and Sabre comes in with a low-ball.
It's the same old scenario. A big guy like Sabre Holdings likes what he sees in a little guy like Travelocity so he pushes his weight around to get what he wants. I recently read in the Fort Worth Star-Telegram that both companies share three members of the board of directors, including the Sabre CEO who serves as chairman of both. Boy, that gets my goat. Guess you could say it would be a win win for that man. But the board is there to serve the stockholders. There have already been eleven class action lawsuits filed by Travelocity stockholders against this unsolicited buyout.
On Monday evening, Travelocity announced that the Special Committee that was set up comprised of independent, outside directors, reported that Sabre's offer was "inadequate." Tuesday morning, Sabre officially filed the cash offer with the Securities and Exchange Commission. A spokesperson for Travelocity told me that they could not comment now that Sabre filed with the SEC. Some speculate that it still might happen, only stingy Sabre will have to get more realistic. I say, if you can, hang on Travelocity. For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.