Robbins LLP: Acquisition of Orbitz Worldwide, Inc. (OWW) by Expedia Inc. (EXPE) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Orbitz Worldwide (NYSE: OWW) by Expedia Inc. (NASDAQ: EXPE). On February 12, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Expedia will acquire Orbitz. Under the terms of the agreement, Orbitz shareholders will receive $12.00 for each share of Orbitz common stock.
Is the Proposed Acquisition Best for Orbitz and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Orbitz is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $12.00 merger consideration represents a premium of only 24.7% based on Orbitz’s closing price on February 11, 2015. This premium is significantly below the average one-day premium of nearly 56.8% for comparable transactions within the past five years. Further, Orbitz has traded as high as $13.26 on August 8, 2013, closing at $12.62 on the same day.
On February 12, 2015, Orbitz released its earnings results for its third quarter 2014, reporting strong quarterly earnings. In particular, Orbitz reported a 12% year-over-year increase in net revenue to $221 million in the fourth quarter 2014, and a 10% increase to $932 million for the full year 2014. Orbitz also reported a 5% year-over-year adjusted EBITDA increase to $35.8 million in the fourth quarter 2014, and an increase of 9% to $156.1 million for the full year 2014. In addition, the company’s gross bookings increased 10% year-over-year to $2.7 billion in the fourth quarter. Orbitz has beat consensus analyst estimates for sales in every quarter for the past year.
In light of these facts, Robbins LLP is examining Orbitz board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Orbitz shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Orbitz shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.