8-KMaterial AgreementsExhibits & Filings

Expedia Group, Inc. 8-K Report, Material Agreement (Feb 13, 2015)

Filed February 13, 2015For Securities:EXPE

Summary

Expedia Group, Inc. (EXPE) has filed an 8-K report announcing a significant strategic move: the execution of an Agreement and Plan of Merger to acquire Orbitz Worldwide, Inc. (OWW). This transaction is structured as a merger where Orbitz will become an indirect wholly owned subsidiary of Expedia, with Orbitz shareholders to receive $12.00 in cash per share. This acquisition represents a material expansion for Expedia and is expected to impact its market position and operational scale within the online travel sector. The deal is subject to customary closing conditions, including Orbitz shareholder approval and regulatory clearances such as the Hart-Scott-Rodino Act. The filing also outlines key terms regarding covenants, termination rights, and a termination fee structure, indicating a robust, albeit conditional, agreement. Investors should monitor the progress of shareholder and regulatory approvals, as well as Expedia's strategy for integrating Orbitz's operations, which will be crucial for realizing the potential benefits of this acquisition.

Key Highlights

  • 1Expedia, Inc. has entered into a definitive merger agreement to acquire Orbitz Worldwide, Inc.
  • 2The acquisition price is $12.00 in cash per share for outstanding Orbitz common stock.
  • 3Orbitz will become an indirect wholly owned subsidiary of Expedia upon closing.
  • 4The transaction is subject to Orbitz shareholder approval and regulatory clearances, including HSR.
  • 5Standard merger agreement terms include customary representations, warranties, and covenants from both parties.
  • 6Expedia and Orbitz have outlined specific termination rights and associated break-up fees, including a $57.5 million fee payable by Orbitz under certain conditions and a $115 million fee payable by Expedia in specific competition-related scenarios.
  • 7The agreement includes provisions restricting Orbitz from soliciting alternative acquisition proposals.

Frequently Asked Questions

This 8-K filing announces Expedia, Inc.'s entry into a material definitive agreement to merge with and acquire Orbitz Worldwide, Inc. It details the key terms of the merger agreement, including the purchase price and conditions for closing.

Orbitz Worldwide, Inc. shareholders will receive $12.00 in cash, without interest, for each share of common stock outstanding at the time of the merger's effective date.

The acquisition is contingent upon several conditions, including the affirmative vote of a majority of Orbitz's outstanding common stock shareholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, other necessary regulatory approvals, and the absence of any governmental orders prohibiting the transaction. Both parties' representations and warranties must also be accurate, subject to materiality qualifications, and covenants must be complied with.

Yes, the merger agreement includes termination fees. Orbitz may be required to pay Expedia a $57.5 million termination fee under certain conditions. If the merger is terminated due to a failure to obtain competition law approvals or a legal prohibition related to competition law, Expedia would pay Orbitz a $115 million termination fee, subject to specific limitations.