Aiming at streamlining its capital structure, Tripadvisor (TRIP, Financials) has signed an agreement to buy Liberty TripAdvisor Holdings (LTRPA, Financials; LTRPB, Financials) in a $435 million deal, the firms said Thursday.
The agreement covers debt payback, stock issuing, and cash payments. While holders of its 8% Series A Cumulative Redeemable Preferred Stock would earn $42.5 million in cash and 3.04 million Tripadvisor common shares, Liberty TripAdvisor stakeholders will get $0.2567 per share in cash, or $20 million.
Additionally repaid will be the 0.50% exchangeable senior debentures of Liberty TripAdvisor, worth $330 million. Net of 2.4 million shares pledged as collateral, Tripadvisor intends to retire around 27 million common stock owned by Liberty TripAdvisor.
Based on the 10-day volume-weighted average price as of Dec. 17, the indicated share price for the purchase is $16.21, a 16% premium.
Subject on usual requirements and shareholder approval, the merger is scheduled to complete in the second quarter of 2025. Should the deal last beyond March 27, 2025, Tripadvisor will provide a loan guaranteed by Liberty TripAdvisor shares to handle any debt expiring on that day.
When completed, Tripadvisor will run under a single class of shares with no controlling shareholder, freeing management to concentrate on strategic development prospects.
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