Will hedge fund Elliott buy out travel technology company Travelport? Or is it using financial jujitsu and hype to make a quick profit? One thing we know: Distribution companies like Travelport remain valuable.
Paul Singer’s Elliott Management Corp. has taken a stake in Travelport Worldwide Ltd. and is urging the travel technology company to launch a strategic review, including exploring a sale.
The New York-based hedge fund believes that Travelport’s stock is undervalued and that several private equity firms might be interested in acquiring it, according to people familiar with the matter. Elliott, which has its own private equity arm, may itself be interested in purchasing the company, the people said, asking not to be identified because the details are private.
Elliott owns an 11.8 percent stake in Travelport in stocks and options, according to a regulatory filing. The investor plans to hold discussions with the company about potential changes, including its strategic direction as well as management and board composition.
Travelport rose more than 17 percent Monday for its biggest-ever intraday jump. Its shares were up more than 16 percent to $16.70 in New York at 3:38 p.m., giving the company a market value of $2.1 billion.
“Travelport has regular and open dialogue with its shareholders and, in this context, considers contributions made by all shareholders about the development of Travelport’s strategy,” the company said in a statement.
Travelport is one of three large global distribution systems for the travel industry, alongside Sabre Corp. and Amadeus IT Group SA. It provides distribution, technology and payments solutions for travel and tourism companies.
If Elliott were to acquire Langley, England-based Travelport, it would be the second buyout deal for its private equity arm, Evergreen Coast Capital Corp. The unit agreed in October to acquire Gigamon Inc. for about $1.6 billion.
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)Subscribe Now
Photo Credit: Paul Singer is the force behind Elliott, a U.S. activist hedge fund that has taken a stake in Travelport and believes that private equity firms might take the travel technology company private. Misha Friedman / Bloomberg