The Inside Story of an Activist Investor's Fight for Travelport
Skift Take
Few companies other than activist investor Elliott Management expressed a serious interest in acquiring Travelport. Elliott twice lost potential private equity partners after they reviewed Travelport's books. The deal price is underwhelming, and that's a signal that some things haven't been going the company's way.
Elliott Management won. Wednesday was the last day for travel technology giant Travelport to shop for rival bids to Elliott's $4.4 billion buyout offer. The companies have not publicized a better offer.
Elliott, a $34 billion hedge fund led by boardroom scourge Paul Singer, will use a private equity arm, Evergreen, for the transaction. It will also partner with private equity firm Siris in a quest to take Langley, UK-based Travelport, the travel tech and travel agent distribution company, private.
However, the road to the deal was pot-holed. Elliott wanted a partner to split the risks. It found one, but when that unnamed partner saw Travelport's books, it balked and ran, according to a Travelport Securities and Exchange Commission filing about the run-up to the deal. The same thing happened again over the summer with a different unnamed partner.
It wasn't until the fall that Elliott found Siris. Four other financial entities kept their interest limited to making phone calls.
Besides private equity, four technology companies called. Among these, only one — opaquely referred to in the financial documents as "Strategic Party C" — showed enough interest that, in June, it made a formal acquisition proposal. It looked at Travelport's books in-depth and listened to a management presentation. Then in July, the company got cold feet.
In short, Elliott and Siris faced only one truly serious rival bid, and that was from another financial firm, believed to be in private equity.
Between September and November 5, an unnamed rival financial entity said it was interested in making a counterbid but that it would similarly need a financial partner to execute a full buyout.
Travelport decided to only allow that rival bidder until January 23 to make a formal counter-offer. No bidder came out of the shadows.
Elliott and Siris will pay only $15.75 a share, a slight 2.3 percent premium to the closing price on the day before the announced deal.
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