Tripadvisor Acquires Liberty TripAdvisor Holdings

Shares of Tripadvisor (NASDAQ:TRIP) surged over 8% in pre-market trading on Thursday after announcing plans to acquire Liberty TripAdvisor Holdings (OTC:LTRPA, OTC:LTRPB) in a $435 million deal.

This transaction, anticipated to finalize in the second quarter of 2025, seeks to streamline Tripadvisor’s capital structure and decrease its outstanding share count.

Deal Overview

• Tripadvisor will obtain all outstanding shares of Liberty TripAdvisor, including Series A and Series B common stock.
• Common stock will convert to $0.2567 per share in cash, totaling approximately $20 million.
• Liberty TripAdvisor’s 8% Series A Cumulative Redeemable Preferred Stock will convert into cash and Tripadvisor common stock, with preferred shareholders receiving about $42.5 million cash and 3.04 million shares of Tripadvisor stock.
• Liberty TripAdvisor’s Exchangeable Senior Debentures, valued at roughly $330 million, will be repaid according to their terms.

Share Retirement

A major element of this acquisition involves Tripadvisor retiring nearly 27 million shares of its common stock held by Liberty TripAdvisor.
This action is seen as effectively buying back Tripadvisor's stock, with an implied price of $16.21 per share, representing a 16% premium based on Tripadvisor’s 10-day average share price as of December 17.

The deal will enable Tripadvisor to simplify its corporate governance by eliminating the dual-class share system that granted Liberty TripAdvisor a controlling interest in the company.

CEO Statement

Matt Goldberg, Tripadvisor’s president and CEO, stated, "The transaction presents a unique and favorable opportunity to simplify our capital structure, create strategic flexibility, and retire a large portion of our shares, while maintaining a healthy balance sheet."

Approval and Conditions

The transaction has been approved by the boards of both companies and was unanimously recommended by Tripadvisor’s Special Committee of independent directors.
However, it is still subject to customary closing conditions, including majority approval from Liberty TripAdvisor’s stockholders.
If the deal does not close by March 27, 2025, Tripadvisor will provide a loan to Liberty TripAdvisor to manage remaining obligations related to its Exchangeable Debentures.