Sabre IPO Downsized As Shares Priced Below Forecast

April 17, 2014

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Travel bookings company Sabre's initial public offering fell short of expectations on Wednesday as its shares were priced below projections, valuing the owner of the Travelocity website at USD$4.14 billion.

The company said it had priced 39.2 million shares at USD$16 each, below its expected $18-$20 per share price range. The company had planned to sell 44.74 million shares in the IPO.

Sabre, spun off from American Airlines parent AMR in 2000, was taken private by TPG Capital and Silver Lake Partners in 2007 for about USD$5 billion, including debt.

If underwriters exercise their option to buy additional shares, the stake held by TPG, Sabre's biggest shareholder, will drop to 36 percent after the offering, from 45.2 percent, while Silver Lake's stake will drop to 22.2 percent from 27.8 percent.

Shares of the company are expected to start trading on Thursday on the Nasdaq under the symbol "SABR".

Texas-based Sabre is the largest global distribution systems provider in North America for air bookings.

The company operates under three platforms - Travel Network, Airline and Hospitality Solutions and Travelocity.

The IPO comes at a time when the travel and tourism industry is growing at a rapid rate.

The industry added USD$6.6 trillion to the global GDP in 2012, according to a research report by the World Travel & Tourism Council. Air travel and hotel spending is expected to grow at 5 percent annually from 2013 to 2017 while technology spending by air transport and hospitality sectors is expected to grow to USD$70 billion in 2017 from USD$60 billion in 2013.

Net proceeds from the offering will be used to repay debt, Sabre said.