Liberty TripAdvisor Secures $330.8 Million Loan Amid Merger Plans

ENGLEWOOD, CO – Liberty TripAdvisor Holdings, Inc. (NASDAQ:OTC:LTRPA), currently valued at $19.55 million in market capitalization, has entered into a loan agreement with Tripadvisor (NASDAQ:TRIP), Inc., securing a term loan facility of up to $330.8 million, according to an 8-K filing with the SEC. According to InvestingPro data, the company operates with a moderate level of debt and maintains a current ratio of 1.08. This financial move comes as part of the ongoing merger process between Liberty TripAdvisor and Tripadvisor, which includes a subsequent merger with Telluride Merger Sub Corp.

The loan, bearing an interest rate based on the secured overnight financing rate plus 6.00%, is set to mature on September 18, 2025, or 15 business days after the termination of the merger agreement, whichever comes first. The funds will be used primarily to repurchase or settle Liberty TripAdvisor’s 0.50% exchangeable senior debentures due 2051. The company’s total debt stands at $1.497 billion, with a debt-to-capital ratio of 54%. The agreement also includes restrictions on Liberty TripAdvisor’s ability to incur additional debt, create liens, and make certain expenditures.

In a related development, Tripadvisor has amended its existing credit agreement, resulting in a $350 million increase to its term loan B facility. This amendment aims to finance the repurchase, repayment, or redemption of Tripadvisor’s outstanding 0.25% Convertible Senior Notes due 2026 and for general corporate purposes.

The merger agreement between Liberty TripAdvisor and Tripadvisor, if completed, will result in Liberty TripAdvisor surviving as a wholly owned subsidiary of Tripadvisor, followed by a merger with TellurideSub LLC, with the latter surviving as a wholly owned subsidiary of Tripadvisor.

These financial arrangements reflect the companies’ efforts to consolidate their operations and strengthen their financial position ahead of the proposed mergers. With an EBITDA of $182 million in the last twelve months and currently unprofitable, the company faces significant challenges. Want deeper insights? InvestingPro subscribers have access to over 10 additional financial health indicators and exclusive analysis tools.The information presented is based on a press release statement and is intended for informational purposes only.

In other recent news, TripAdvisor has been at the center of significant corporate activity. BTIG analysts maintained a Buy rating on TripAdvisor with a price target of $20, emphasizing the potential benefits of its recent acquisition of Liberty TripAdvisor Holdings, valued at $435 million. This transaction, announced in December 2023, is expected to streamline TripAdvisor’s control and capital structure, potentially attracting new interest from investors. Additionally, a recent SEC filing revealed that TripAdvisor’s special committee received a non-binding indication of interest from Party 7, proposing to acquire shares not held by Liberty TripAdvisor for $18.00 to $19.00 per share. Despite this, the committee found the proposal inadequate and chose not to pursue it further.

The Liberty TripAdvisor Board has instructed its management to seek waivers for discussions with Party 7 regarding a possible acquisition of Liberty TripAdvisor only. However, TripAdvisor’s special committee decided it was not in the best interests of the company or its shareholders to engage with Party 7. BTIG analysts noted that the previous interest in TripAdvisor is a positive sign for the company’s future once the acquisition is finalized. Investors responded positively to the potential for a competitive bidding scenario, reflecting optimism about TripAdvisor’s ongoing strategic discussions. As these developments unfold, TripAdvisor’s market position and shareholder value remain areas of focus.

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