Skift Take
Lots of supposedly smart travel industry folks in recent years mused that no company would be interested in buying Orbitz. They were obviously wrong. Expedia will pay $1.34 billion, another company submitted a bid, and a whole bunch of other companies kicked the tires.
In the 19 months before Expedia Inc. and Orbitz Worldwide announced Expedia's $1.34 billion acquisition of Orbitz, Chicago-based Orbitz conducted discussions with 17 other domestic and foreign strategic acquirers or private equity firms about potential investments, related commercial relationships or acquisitions, although only one other potential strategic acquirer, besides Expedia, actually submitted a bid.
Although there was plenty of kicking the tires beforehand, the Orbitz board formally endorsed a sales process on October 6, 2014 but decided to delay approaching Expedia about an acquisition at that time because Orbitz wanted to study potential regulatory issues, and believed that Expedia could move fast on an acquisition in light of its experience in such transactions and its familiarity with Orbitz's business.
Orbitz Worldwide CEO Barney Harford approached a member of Expedia Inc.'s senior management more than two months later, on December 16, 2014, about a sale, and Expedia signed a confidentiality agreement two days later.
The Expedia bid that the Orbitz board accepted on February 11, 2015 was for $12 per share, which was a 30 percent premium over the stock's closing price on February 10. Expedia would have to pay Orbitz a $115 million fee (8 percent of the deal's equity value) if regulators killed the deal, and Orbitz would have to pay Expedia $57.5 million (4 percent of the deal's equity value) if Orbitz accepts a superior offer in the interim.
Expedia, according to an Orbitz regulatory filing that includes the background to the merger, made its initial preliminary proposal to acquire Orbitz
