Baker Botts Leads $325M Liberty TripAdvisor Funding

By Joyce Hanson
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Law360 (March 16, 2020, 1:22 PM EDT) -- Baker Botts LLP said Monday it advised online travel community TripAdvisor's controlling shareholder on a $325 million private-equity investment funding from Certares Management LLC as the COVID-19 pandemic delivers a direct economic hit to the hospitality industry.

TripAdvisor parent Liberty TripAdvisor Holdings Inc. said Monday it entered into an agreement with funds managed by Certares — a PE giant whose investing activities focus on hospitality, travel and tourism — so that Certares will buy $325 million of the holding company's preferred stock and help Liberty entirely repay a margin loan that it used to invest in securities.

The investment comes as Liberty TripAdvisor's share price has fallen more than 80% on the open market since the new year began, closing at $7.44 per LTRPA share on Jan. 2 versus $1.52 per share on Friday.

"This investment secures long-term financing, which is not tied to stock price movements in this volatile environment," Greg Maffei, Liberty TripAdvisor's chairman, president and CEO, said in a statement Monday.

Under the terms of the deal, Certares is buying 8% Series A cumulative redeemable preferred stock from Liberty TripAdvisor, the travel company said. The net proceeds from the investment will be combined with cash on hand and $34 million of secured borrowings against a variable price forward contract. The total sum will then repay 100% of the outstanding balance under Liberty TripAdvisor's existing margin loan, according to the company.

Once the deal is completed, Certares founder and senior managing director Greg O'Hara is expected to join Liberty TripAdvisor's board of directors. Liberty TripAdvisor said it expects to complete the investment within 10 business days.

"Liberty TripAdvisor is a natural fit for Certares," O'Hara said in a statement. "We seek leaders in our sectors and look forward to deeper involvement with Liberty TripAdvisor and TripAdvisor, the world's largest online travel community."

According to a Form 8-K filed with the U.S. Securities and Exchange Commission, Liberty TripAdvisor agreed on March 15 to issue and sell to Certares 325,000 shares of its newly created 8% Series A preferred stock, for a purchase price of $1,000 per share.

"We welcome Certares as a strategic investor in Liberty TripAdvisor," Maffei said. "Certares has deep experience and a highly successful track record investing in the travel, tourism and hospitality sectors, and we will greatly benefit from Greg's insight on our board."

Liberty TripAdvisor was represented in the transaction by Baker Botts LLP as legal counsel. The Baker Botts deal team included Samantha Crispin, Frederick McGrath, Bryan Henderson, Brittany Uthoff, Emilie Heck, Madeline Tusa, Derek Gabriel, Robert Wann, Tamar Stanley, Josh Mandell and Matt Donnelly.

Certares' legal counsel was Simpson Thacher & Bartlett LLP. The Simpson Thacher deal team included Juan Naveira, Eric Swedenburg, Anthony Vernace, Janet Yu, Nina Bakhtina, Tarra Theisen, Risë B. Norman, Andrew Purcell, Sophie Staples, Jennifer Levitt, Peter Guryan, Kelly Karapetyan, Jonathan Lindabury and Caitlin Wood.

Goldman Sachs & Co. LLC and Société Générale SA served as financial advisers.

--Editing by Marygrace Murphy.

Update: This article has been updated with counsel information.

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