Expedia Group is in advanced talks to sell a stake to private-equity firms Silver Lake and Apollo Global Management Inc. for an investment of around $1 billion, reported The Wall Street Journal. The company is also considering selling debt.
The private equity firms are in discussions to receive board seats at the online-booking company, whose shares have fallen by more than half since late February as investors brace for hits to its portfolio of businesses, including Hotels.com, Travelocity and Vrbo.
The company withdrew 2020 guidance last month, saying the coronavirus outbreak would have a larger than expected financial impact. Expedia had about $1.4 billion in free cash flow before the crisis, according to Moody’s.
Earlier in February, Expedia also announced plans to cut 3,000 jobs following internal battles between Barry Diller and former chief executive Mark Okerstrom over the direction the company was taking. Booking Holdings has told employees to expect lay-offs in the coming months, as well.
Travel companies have rushed to shore up their finances following a sharp drop in revenues. The cruise operator Carnival raised $6.3bn in debt and equity from investors this month following high-profile breakouts of the virus on its ships.
Silver Lake has recently been active in several prominent deals, including a combined $2bn debt and equity financing in the travel accommodation group Airbnb. If the deal closes, Silver Lake would now have stakes in two of the leading online travel players.
Note that Barry Diller controls about 28 percent of the votes of the company. A $1 billion stake in Expedia Group would be a minority investment and would amount to a much smaller percentage of voting power than Diller currently wields.
Several US-listed companies have raised about $17bn this year up until April 8 from so-called private investments in public equity, almost double the amount compared with the same period last year, according to PrivateRaise data.
JPMorgan and Moelis are advising on the transaction, which was first reported by The Wall Street Journal.
Expedia, Apollo and Silver Lake declined to comment.
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