Benzinga | Mar 22, 2021 09:04AM EDT

Liberty TripAdvisor Seeks $300M Via Debt For Preferred Stock Buyback

Online travel community Liberty TripAdvisor Holdings Inc (NASDAQ: LTRPA) announced plans to offer $300 million exchangeable senior debentures due 2051 convertible for subsidiary Tripadvisor, Inc (NASDAQ: TRIP) shares under a private offering.

* Liberty TripAdvisor would utilize the offering proceeds to fund the cash portion of the purchase price for the Liberty TripAdvisor 8% redeemable preferred share buyback in a pending private transaction with an affiliate of Certares Management LLC and other general corporate purposes.

* Liberty TripAdvisor expected to buyback 40% of the preferred share held by Certares, based on the closing price of TRIP shares on March 19, 2021, under a buyback agreement with Certares.

* The preferred shares would be repurchased in exchange for a combination of $92 million value of Tripadvisor shares, net proceeds from a proposed new issuance by Liberty TripAdvisor of exchangeable senior debentures with Tripadvisor shares underlying shares minus $35 million to fund Liberty TripAdvisor's anticipated working capital needs.

* The $35 million would be sufficient to fund interest payments expected under the proposed exchangeable debentures through March 27, 2025, and certain transaction expenses.

* LTRPA and TRIP share prices gained 493% and 282% in last year, respectively.

* Price action: LTRPA shares closed at $7.47 on Friday. TRIP shares are trading lower by 1.65% at $59.99 in the premarket session on the last check Monday.