Amid secretive negotiations to take over Tripadvisor, little information has leaked about the outlines of the prospective deal or even who the buyer might be. But in recent weeks analysts have raised an intriguing possibility.
The Needham-based online travel site has said only that its board formed a special committee and hired a financial adviser this month to evaluate takeover offers. Greg Maffei, who runs the holding company that owns a controlling stake in Tripadvisor, revealed that the company was in play in a securities filing, saying discussions started Feb. 9 for an all-cash takeover.
Analysts have since pointed to a potential buyer: New York private equity firm Certares Management, which focuses on the tourism and travel industry and already owns a stake in Tripadvisor (1.7 million shares, according to a securities filing last year). Certares founder Greg O’Hara has been on Tripadvisor’s board since 2020.
Certares has previously invested in rental car company Hertz, private jet service Wheels Up, and American Express’s business travel agency, among other travel-related businesses. The firm also owns a string of hotels including the Sea Crest Beach Hotel on Cape Cod, which it bought last year for an undisclosed sum.
Tripadvisor and Certares declined to comment.
Tripadvisor would fit neatly into Certares’s strategy of using trend data from its travel and transportation investments to guide its hotel purchases. “When we make investments, we have an unbelievable amount of travel data right behind us,” Certares senior managing director Nolan Hecht said in an interview last year.
Certares first got involved with Tripadvisor in 2020. The firm invested $325 million in Liberty TripAdvisor to help cover a margin loan that had to be paid off. Liberty TripAdvisor later repaid part of the investment with cash and 1.7 million shares of Tripadvisor.
Alexander Nordhagen, a senior credit analyst at investment firm Balyasny Asset Management in New York, raised Certares as possibly involved in acquiring Tripadvisor on a quarterly earnings call with Maffei on Feb. 16.
“If with respect to any acquisition discussions Certares was involved, would that need to be disclosed?” the analyst asked Maffei.
Maffei is the chief executive of media conglomerate Liberty Media but also runs Liberty TripAdvisor Holdings, a spinoff that owns the controlling stake in Tripadvisor and was approached about the all-cash offer.
“The disclosure we made about being approached is the only disclosure we’ll make until we comment further, and whether or not with Certares or anybody else who made the offer is really beyond what we’re going to reveal today,” Maffei replied.
Goldman Sachs analyst Ben Miller rates the chance of any deal being completed at 30 percent to 50 percent. Based on acquisitions of similar companies, Tripadvisor might be worth $5.8 billion including debt, Miller wrote in a recent report. He raised his price target on the company’s shares to $34 from $23.
Tripadvisor’s stock price has gained since the takeover talk emerged. The stock was trading at $27.33 on Friday, a 22 percent gain since the announcement of the special committee. That puts its enterprise value, which includes stock and debt, at $3.6 billion, well below Miller’s estimated deal value. The stock price has also never returned to the over-$100 price it hit a decade ago before some missteps and competition from Google curbed the company’s growth.
BTIG analyst Jake Fuller resisted valuing the possible deal without more information about the buyer. But Tripadvisor “likely wouldn’t have gotten board approval to engage, formed a special committee and retained an advisor if an offer weren’t credible,” Fuller wrote in a recent report.
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him @ampressman.
