Sabre Makes Hostile Travelocity Bid

Sabre Holdings Corp. on Tuesday began a $345-million hostile offer for the 30% of Travelocity .com Inc. it doesn’t own after the second-biggest U.S. online travel agent rejected the bid.

Travelocity.com said Sabre’s tender offer of $23 a share for 15 million shares is “inadequate.”

The online company was spun off by Sabre two years ago and combined with Preview Travel Inc., whose shareholders got 30% of the new company. The stock has traded as high as $51.88, double the offer price. Sabre, the biggest U.S. travel-reservation company, needs to boost its stake to 90% to force remaining investors to tender shares.

Shares of Fort Worth-based Travelocity.com, ranked second by value of travel sold on its site, fell 44 cents to $26.16 on Nasdaq. They had traded as low as $9.92 in September. Southlake, Texas-based Sabre rose 1 cent to $48.05 on the New York Stock Exchange.

The offer was 20% higher than the share price at the time of last month’s announcement. Travelocity.com stock surged 39% after the bid, a signal that investors want Sabre to increase its price, analysts say.

Sabre spokesman Michael Berman wouldn’t comment on whether the company will increase its offer price. Executives from Sabre declined to be interviewed.

Travelocity.com and Sabre have the same chairman, William Hannigan.

A committee of outside Travelocity.com directors, led by investment firm Salomon Smith Barney Inc., found that Sabre’s offer was an “opportunistic attempt to acquire Travelocity at a time when its stock price is temporarily depressed,” Travelocity.com said.

If it acquires the rest of Travelocity.com, Sabre plans to add travel services to boost sales, analysts said.