Expedia (EXPE -1.33%) is holding advanced discussions with Silver Lake and Apollo Global Management, the two private equity firms, to sell a stake in the online travel company.
With travel coming to a screeching halt in the U.S. amid the COVID-19 pandemic and with travel bans instituted across the globe, Expedia has been struggling. So much so it’s now looking to shore up capital by potentially selling the stake to the two PE firms.
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Citing people familiar with the matter, the Wall Street Journal reported a deal could be announced this week with the Silver Lake and Apollo Global Management spending $1 billion for the stake. It’s unclear what percentage of the company the investors would be purchasing. The investor groups will get seats on the Expedia board as a result of the deal, noted the paper.
Talks could still fall apart and the tech stock could opt to seek other funding alternatives such as a public debt offering. If a deal is reached, it’s expected to be enough money to keep Expedia operational until travel restrictions are lifted and the economy recovers.
The COVID-19 pandemic has destroyed the travel industry and many of the companies serving that market. In March Experida withdrew its guidance for the year, warning the impact from the pandemic would be worse than it previously expected. The online travel company also suspended its share repurchase program. During the same month Expedia used close to all $2 billion of a credit facility, reported the WSJ.Expedia ended 2019 with $4 billion in long-term debt and around $3 billion in cash. JPMorgan Chase and Moelis are advising Expedia on the deal.
