Tripadvisor's Controlling Shareholder and Certares Are in 'Active Discussions' About Transactions

09.08.2024 - 00:20 / skift.com / Greg Ohara / Dennis Schaal / Liberty Tripadvisor / Greg Maffei

Liberty Tripadvisor Holdings is looking to do a deal, one that could remove what Tripadvisor chairman Greg Maffei characterized as “probably a cloud on Tripadvisor’s stock.”

Maffei, who’s CEO of Liberty Tripadvisor, which is Tripadvisor’s controlling shareholder, said Thursday that Liberty Tripadvisor is in “active discussions” with Certares “about transactions that might arise.”

“We continue to evaluate strategic alternatives with the TripAdvisor committee, and we will not be able to comment further until or unless the definitive documents are executed or discussions terminate,” Maffei said during Liberty Tripadvisor’s second quarter earnings call.

He was referring to a special committee of independent Tripadvisor board directors set up in February to evaluate strategic alternatives that Liberty Tripadvisor said it was entertaining.

Private equity firm Certares, with major holdings in travel companies ranging from Hertz and American Express Global Business Travel to Internova, in March 2020 became a strategic investor in Liberty Tripadvisor with a purchase of $325 million in preferred stock, with an 8% dividend.

Liberty Tripadvisor is on the hook to Certares to repay the $325 million preferred stock investment by March 2025, or would have to pay a 12% dividend.

Greg O’Hara, who runs Certares, is a Tripadvisor board member.

The “active discussions” between Liberty Tripadvisor and Certares would revolve around that repayment, and any other transactions that might flow out of it.

It’s unclear what these transactions, if they occur, would mean for Tripadvisor.

Maffei’s reference to the potential “cloud” on Tripadvisor stock refers to concerns about whether its controlling shareholder can repay the $325 million investment to Certares.

Asked during the earnings call what the impact of Liberty Tripadvisor’s controlling stake in Tripadvisor has on the latter’s stock price, Maffei said: “I would think at this point, the potential issues around Liberty TripAdvisor are probably a cloud on TripAdvisor’s stock. That’s probably a fair statement, yes.”

Tripadvisor’s shares were trading at $13.89 mid-day Thursday. Liberty Tripadvisor’s shares traded at $0.48 over the counter as of Wednesday.

In May, Tripadvisor’s special committee said there was no merger in the works. Apollo Global Management was thought to be a suitor.