NEEDHAM, Mass., March 23, 2021 /PRNewswire/ -- Tripadvisor,
Inc. (Nasdaq: TRIP) ("Tripadvisor") today announced that it has
priced an offering of $300 million
aggregate principal amount of convertible notes due 2026 (the
"Notes") in a private offering. Tripadvisor also granted to the
initial purchasers of the Notes an option to purchase up to an
additional $45 million aggregate
principal amount of the Notes within a 13-day period beginning on,
and including, the initial closing date. The offering of the Notes
and the capped call transactions described below are expected to be
completed on or about March 25, 2021,
subject to customary closing conditions.
The Notes will be senior unsecured obligations of Tripadvisor
and will be guaranteed by each of its domestic subsidiaries that
guarantees Tripadvisor's credit facility. Tripadvisor intends to
use a portion of the net proceeds from the offering to fund the net
cost of entering into the capped call transactions described below.
Tripadvisor intends to use the remainder of the net proceeds from
this offering for general corporate purposes, which may include
repayment of debt, including the redemption of its 2025 Senior
Notes prior to maturity. Net proceeds may be temporarily invested
prior to use. If the initial purchasers exercise their option to
purchase additional notes, then Tripadvisor intends to use a
portion of the additional net proceeds to fund the cost of entering
into additional capped call transactions as described
below.
The Notes will bear interest at the rate of 0.250% per annum.
The Notes will mature on April 1,
2026, unless earlier repurchased or converted. The initial
conversion rate for the Notes is 13.5483 shares of Tripadvisor's
common stock per $1,000 principal
amount of Notes (equivalent to an initial conversion price of
approximately $73.81 per share of
Tripadvisor's common stock), which represents an approximately
37.50% conversion premium over the last reported sale price of
$53.68 per share of Tripadvisor's
common stock on The Nasdaq Global Select Market on March 22, 2021.
Prior to the business day immediately preceding January 15, 2026, the Notes will be convertible
only upon satisfaction of certain conditions and during certain
periods, and thereafter, at any time until the close of business on
the second scheduled trading day immediately preceding the maturity
date. Tripadvisor will satisfy any conversion elections by paying
or delivering, as the case may be, cash, shares of its common stock
or a combination of cash and shares of its common stock, at its
election. Separately, the Notes will be redeemable, in whole or in
part, at Tripadvisor's option at any time, and from time to time,
on or after April 1, 2024 and on or
before the 30th scheduled trading day immediately before the
maturity date upon the satisfaction of certain conditions.
In connection with the pricing of the Notes and upon any
exercise of the option by the initial purchasers to purchase
additional notes, Tripadvisor expects to enter into privately
negotiated capped call transactions with one or more dealers, which
may include certain initial purchasers or their respective
affiliates and/or other financial institutions (the
"counterparties"). The capped call transactions are expected to
offset the potential dilution to the common stock upon any
conversion of notes and/or offset any cash payments Tripadvisor is
required to make in excess of the principal amount of converted
notes, as the case may be, with such offset subject to a cap.
Tripadvisor expects that, in connection with establishing their
initial hedge of the capped call transactions, the counterparties
or their respective affiliates will purchase shares of
Tripadvisor's common stock and/or enter into various derivative
transactions with respect to Tripadvisor's common stock
concurrently with, or shortly after, the pricing of the Notes,
including potentially with certain investors in the Notes. These
activities could increase (or reduce the size of any decrease in)
the market price of the common stock or the Notes at that
time. In addition, the counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Tripadvisor's common
stock and/or purchasing or selling shares of common stock or other
securities of Tripadvisor in secondary market transactions
following the pricing of the Notes and prior to the maturity of the
Notes (and are likely to do so during any observation period
relating to a conversion of the Notes). This activity could also
cause or prevent an increase or a decrease in the market price of
the common stock or the Notes, which could affect the ability of
noteholders to convert the Notes and, to the extent the activity
occurs during any observation period related to a conversion of the
Notes, could affect the number of shares of Tripadvisor's common
stock and value of the consideration that noteholders will receive
upon conversion of the Notes.
Concurrent with this offering of Notes, Liberty TripAdvisor
Holdings, Inc. ("Liberty TripAdvisor"), Tripadvisor's controlling
stockholder, is offering $300 million
aggregate principal amount of Exchangeable Senior Notes due 2051
(the "Exchangeable Notes"), or up to $330
million aggregate principal amount of Exchangeable Notes if
the initial purchasers in that offering exercise their
over-allotment option to purchase additional Exchangeable Notes in
full, in a transaction exempt from the registration requirements of
the Securities Act in reliance upon Rule 144A thereunder.
Each Exchangeable Note will be exchangeable into shares of
Tripadvisor common stock held by Liberty TripAdvisor, cash or a
combination thereof, at Liberty Tripadvisor's election, at an
initial exchange rate of 14.3299 shares of Tripadvisor's common
stock, which is equivalent to an initial exchange price of
approximately $69.78 per share.
Neither offering is contingent on the successful completion of the
other.
In connection with the concurrent offering by Liberty
TripAdvisor, Tripadvisor believes Liberty TripAdvisor has entered
into a repurchase agreement with an affiliate of Certares
Management LLC ("Certares") pursuant to which Certares has agreed
to waive its put right with respect to its Series A Preferred Stock
of Liberty TripAdvisor, Liberty TripAdvisor will repurchase from
Certares a portion of shares of its Series A Preferred Stock in
Liberty TripAdvisor with a combination of cash from a portion of
the net proceeds of Liberty TripAdvisor's concurrent offering of
debentures and with shares of Tripadvisor common stock owned by
Liberty TripAdvisor, and Liberty TripAdvisor will have a call
option commencing March 27, 2024 to
call and repurchase the Series A Preferred Stock of Liberty
TripAdvisor.
In connection with the repurchase of a portion of the Liberty
TripAdvisor Series A Preferred Stock from Certares, Tripadvisor
believes Liberty TripAdvisor will be transferring shares of
Tripadvisor common stock to Certares. Certares, as a holder of
Tripadvisor shares, will not be a party to the lock-up restrictions
in connection with this offering. However, pursuant to such
repurchase agreement, Tripadvisor believes Certares will be subject
to restrictions on the transfer of such shares for a period of six
months from the date of the pricing of the concurrent offering of
Exchangeable Notes. In connection with that offering,
Tripadvisor believes Liberty TripAdvisor will agree that it will
not waive the restrictions on Certares' ability to transfer such
common stock for a period of 60 days from the date of the purchase
agreement relating to the concurrent offering without the consent
of the initial purchasers in that offering.
The Notes and related guarantees are being offered only to
persons reasonably believed to be qualified institutional buyers in
reliance on Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"). This press release shall not constitute an
offer to sell or the solicitation of an offer to buy the Notes and
related guarantees. Any offers of the Notes and related guarantees
are being made only by means of a private offering memorandum. The
Notes and related guarantees have not been registered under the
Securities Act, or the securities laws of any other jurisdiction,
and may not be offered or sold in the
United States without registration or an applicable
exemption from registration requirements.
About Tripadvisor
Tripadvisor, the world's largest travel guidance platform*,
helps hundreds of millions of people each month** become better
travelers, from planning to booking to taking a trip. Travelers
across the globe use the Tripadvisor site and app to discover where
to stay, what to do and where to eat based on guidance from those
who have been there before. With more than 884 million reviews and
opinions of 7.9 million businesses, travelers turn to Tripadvisor
to find deals on accommodations, book experiences, reserve tables
at delicious restaurants and discover great places nearby. As a
travel guidance company available in 49 markets and 28 languages,
Tripadvisor makes planning easy no matter the trip type.
Forward-Looking Statements
Statements regarding the offering and the expected use of
proceeds therefrom are "forward-looking statements" and are subject to
known and unknown risks and uncertainties that may cause actual
results to differ materially from those expressed in such
forward-looking statements. These risks and uncertainties include,
but are not limited to, the ability to complete the offering on
favorable terms, if at all, and general market conditions
(including the COVID-19 pandemic and related economic impact) which
might affect the offering. Additional information concerning these
and other important risks and uncertainties can be found in
Tripadvisor's filings with the SEC, including under the captions
"Cautionary Note Regarding Forward-Looking Statements" and "Risk
Factors" in Tripadvisor's Annual Report on Form 10-K for the year
ended December 31, 2020, as filed on
February 19, 2021. Tripadvisor
undertakes no obligation to update any forward-looking statements
to reflect subsequent events or circumstances.
* Source: SimilarWeb, unique users de-duplicated
monthly, December 2020
** Source: Tripadvisor internal log files
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SOURCE Tripadvisor