(Reuters) - Travelport Worldwide Ltd TVPT.N said on Monday that buyout firms Siris Capital Group and Elliott Management will take it private for $4.4 billion, ending an eight-month effort by activist investor Elliott to buy the travel software company.
Elliott, which has a 12 percent stake in Travelport, pushed the company to explore a sale earlier this year. Reuters had first reported on Dec. 6 that the deal was imminent.
The consortium will offer $15.75 per share, a 2.3 percent premium to the company’s closing price on Friday.
Travelport, which went public in 2014 after being owned by Blackstone Group (BX.N), is allowed to solicit other takeover offers during a “go-shop” provision until Jan. 23.
Morningstar analyst Dan Wasiolek recommended in a research note that shareholders reject the “disappointing” offer.
Investors appeared to shrug off the prospect of a much higher bid. Travelport shares closed 2.6 percent higher at $15.80, just above Monday’s deal price, around the level at which it went public in 2014.
Facing larger rivals Amadeus IT Group SA (AMA.MC) and Sabre Corp (SABR.O), Travelport has focused on its stable but relatively slow-growing business of providing technology infrastructure to travel vendors for hotel reservations and package tours. Its faster-growing payments business, eNett, has been a bright spot for the company.
Travelport said on Monday it expected little change in its adjusted 2019 earnings before interest, tax, depreciation and amortization (EBITDA) compared to last year, and estimated slightly lower adjusted net income due to higher interest expenses.
Blackstone acquired Travelport along with Technology Crossover Ventures for $4.3 billion in 2006.
Travelport’s headquarters will remain in the United Kingdom, and the deal is expected to close in the second quarter of 2019.
Siris, along with New York-based Elliott, will have the task of helping spark growth at Travelport. Elliott, with $35 billion under management, has a dedicated team called Evergreen Coast Capital chasing buyout deals in the technology sector, which closed its first public deal last year.
Evergreen has had a busy year, with the Travelport announcement coming just a month after it clinched its largest deal to date to buy Athenahealth for $5.7 billion along with private equity firm Veritas Capital. Elliott will focus on operating and turning around these companies, dealmakers said.
“Recognizing a potentially undervalued stock requires a quite different set of skills than operating a company for a number of years to generate attractive returns, so I would expect them to team up with more traditional private equity firms in these deals for a period of time,” said Stefan Selig, a former banker who founded the financial and strategic advisory firm BridgePark Advisors LLC.
One of Evergreen’s portfolio companies, ASG Technologies Group, said on Monday it had raised its offer to buy Mitek Systems Inc (MITK.O), a software company with a market capitalization of $371 million. It also used a network monitoring software company it took private, Gigamon, to buy a cyber security startup this year for around $100 million in July.
Reporting By Aparajita Saxena in Bengaluru; Editing by Shounak Dasgupta and Richard Chang