Boston, MA 05/23/2014 (wallstreetpr) – A significant shareholder in the global online travel company Orbitz Worldwide, Inc. (NYSE:OWW) has plans to reduce its stake in the company. Orbitz will neither receive any proceeds from the sale nor have its shares diluted. As such, the transaction has no impact on the share value of the current shareholders.
It is important noting that in spite of the transaction the selling shareholder will still retain a significant stake in the company. As such, the deal seems far from being a divestment. But in the same breath, the selling company said it intends to explore other opportunities with the proceeds raised from the transaction.
Who is selling?
Travelport is the firm behind the stock selling at Orbitz Worldwide, Inc. (NYSE:OWW). The firm currently owns about 48 percent stake in Orbitz and will reduce its stake to between 36.5 and 37.6 percent depending on whether underwriters exercise their option to acquire additional shares.
Travelport’s sale of a stake in Orbitz does not as come a surprise. The company revealed to a travel industry publication earlier this month that it would unload its shares in Orbitz if the prices and market conditions were favorable. The planned selling comes at a time when shares of Orbitz have started showing upward trend in recent times. The shares are up 0.56 percent since the beginning of the year.
According to a Travelport spokesperson, the company will still remain a substantial stockholder in Orbitz Worldwide, Inc. (NYSE:OWW) even after the monetization.
Travelport precipitates secondary offering
About 7.5 million shares, or slightly more, will be offered in a secondary offering by an affiliate of Travelport. The shares will be offered through an underwritten stock offering process. As mentioned earlier, the transaction will not impact the current value of Orbitz shares.
Orbitz Worldwide, Inc. (NYSE:OWW) reported its 1Q2014 results earlier this month. The company generated revenue of $210.30 million, better than the consensus estimate of $205.50 million.
