Sabre Shareholders OK $4.5B Buyout

Shareholders of Sabre Holdings Corp., the parent of online travel-booking service Travelocity.com, on Thursday approved a $4.5 billion offer for the company from private buyout firms.

Affiliates of Silver Lake Partners and Texas Pacific Group will pay $32.75 per share in cash and assume about $550 million in Sabre debt.

At a brief, sparsely attended special meeting, the sale was approved by owners of 61.5 percent of Sabre stock, the company said. That represented 86.7 percent of the shares voting.

Chairman and Chief Executive Michael S. "Sam" Gilliland said the sale wouldn't change Sabre's business strategy.

"The thing we're excited about is that they focus on industries that should be very helpful to us," Gilliland said after the meeting.

Texas Pacific has invested in other travel-related companies, including airlines and Hotwire, a discount travel Web site. Silver Lake has invested in several technology businesses.

Sabre hired Goldman Sachs and Morgan Stanley in September to consider options including a sale of the business. According to regulatory filings, Sabre got two formal bids from private buyers, with the TPG-Silver Lake offer being slightly higher.

Sabre also runs reservation-distribution systems that link airlines with travel agents. It started as an arm of American Airlines but was eventually spun off into a separate company.

Sabre had 2006 sales of $2.8 billion. It has about 9,000 employees and is based in the Fort Worth suburb of Southlake. The company said recently that it expects annual sales to grow 5 to 6 percent and that earnings before special items, including interest and taxes, would grow 8 to 10 percent each year through 2012.

Sabre said in a regulatory filing this week that some of its executives would invest cash and Sabre stock to buy a combined stake of up to 2 percent in the new private company. Gilliland said about two dozen executives, including himself, were expected to exercise that option.

Last week, the company said it settled shareholder lawsuits that were filed in state district court in Fort Worth after the sale was announced. The company agreed that if the new buyers "flip" the business - sell at least 60 percent of Sabre or the Travelocity unit - within six months, it would share one-fourth of the gain with the old shareholders.

The lawsuits had charged that Sabre directors weren't looking out for shareholders when they agreed to sell. The settlement was designed to ease fears that the private-buyout firms would earn a quick profit - not available to old shareholders - by reselling the company or its most prized division. The settlements will be presented to the courts after the deal closes.

Sabre commissioned an analysis by Bear Stearns that found more than half the company's value related to Travelocity.

The value of Sabre stock had been mostly unchanged for four years, although it enjoyed a run-up in price for four months before the Texas Pacific-Silver Lake offer was announced Dec. 12.

Sabre shares were unchanged at $32.68 in afternoon trading Thursday on the New York Stock Exchange.


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