Expedia, which operates several brands including Travelocity, Orbitz and Vrbo, is facing fallout from the coronavirus pandemic.
Photo: David Ryder for The Wall Street JournalExpedia Group Inc. EXPE 3.42% named a new chief executive as the online travel-booking company confirmed it will raise billions to shore up a business that has been devastated by the coronavirus pandemic.
The company, which had been without a chief executive and permanent finance chief since December, named Vice Chairman Peter Kern as CEO and gave acting Chief Financial Officer Eric Hart the role permanently, the company said Thursday.
The Seattle company agreed to sell a roughly $1.2 billion equity stake to Silver Lake and Apollo Global Management Inc. APO 5.34% and to give each private-equity firm a seat on its board. Expedia also said it would issue $2 billion of additional debt and take other steps, including halting dividends, cutting executive salaries and furloughing some employees, as travel remains at a virtual standstill.
Expedia said in a securities filing Thursday that gross bookings dropped roughly 40% in the first quarter from a year earlier, according to preliminary results.
The Wall Street Journal reported Tuesday that the buyout firms were nearing a deal with Expedia, which operates brands including Travelocity, Orbitz and Vrbo.
The private-equity firms’ investment, a so-called private investment in public equity, or PIPE, is a way for companies to efficiently raise capital by selling big stakes to established investors who often take board seats and get involved in setting business strategy. While there have been a handful of PIPE deals lately, this is one of the largest.
The investments signal a vote of confidence in a company’s prospects, but come at a cost. In Expedia’s case, it is selling preferred shares that will pay dividends at a steep fixed rate of 9.5% and warrants to purchase common stock.
Nonetheless, Expedia investors cheered the news, with the stock surging by about 7.5% Thursday morning, adding to a similar gain Wednesday.
“We have one mandate—to conserve cash, survive, and use this time to reconstruct a stronger enterprise to serve the future of travel,” Expedia Chairman Barry Diller, who has the same role at media-holding company IAC/InterActive Corp., said in a statement.
The company was already struggling to compete with the increasing sway of Alphabet Inc.’s Google search engine in travel booking. Expedia’s former CEO and CFO were ousted in December following a disagreement over strategy with Mr. Diller and the rest of the company’s board.
Silver Lake and Apollo are also likely to participate in a bond offering launched Thursday, according to people familiar with the matter.
JPMorgan Chase & Co. and Moelis & Co. were Expedia’s financial advisers. Evercore Inc. and Goldman Sachs Group Inc. advised Apollo.
Write to Cara Lombardo at cara.lombardo@wsj.com and Dave Sebastian at dave.sebastian@wsj.com
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
"Ceo" - Google News
April 23, 2020 at 11:16PM
https://ift.tt/2xKt9ud
Expedia Names New CEO, Confirms Investment From Private-Equity Firms - The Wall Street Journal
"Ceo" - Google News
https://ift.tt/37G5RC0
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Expedia Names New CEO, Confirms Investment From Private-Equity Firms - The Wall Street Journal"
Post a Comment