November 26, 2003
Orbitz, one of the top online travel booking sites, on Wednesday set the terms of its long-awaited initial public offering, indicating that it could gross as much as $303.6 million for the company and shareholders.
Orbitz said 11 million Class A common shares will be sold to the public for $22 to $24 apiece. The company will sell 4 million shares, and stockholders will sell 7 million, the Chicago-based company disclosed for the first time in a filing with the Securities and Exchange Commission.
The travel site predicted it will net about $82.2 million in proceeds, which it plans to use for working capital and general corporate purposes.
Orbitz was formed by leading U.S. airlines to access the rapidly growing online travel industry, to address the need for a comprehensive display of fares in a single location and to establish a lower-cost distribution channel for air travel suppliers, according to the prospectus.
Original investors and founders were Continental Airlines, Delta Air Lines, Northwest Airlines and United Air Lines. Subsequently, American Airlines joined as an investor, Orbitz said.
The company said it will not get any of the money from the IPO shares sold by the stockholders, which include some of its founders.
American and United are each selling 1.8 million of the 9.3 million shares each currently holds, a move that would lower their individual stakes to roughly 18% from 25%.
Northwest and Continental are also selling stock. Northwest's stake will drop to about 11% from 15%, and Continental's position will fall to about 10% from 13%, according to the SEC filing.
Orbitz applied for a Nasdaq listing under the symbol "ORBZ." The initial public stock sale will be handled by Goldman Sachs, Credit Suisse First Boston, Legg Mason Wood Walker and Thomas Weisel Partners.
The underwriters have an option to buy an extra 1.65 million extra shares in case of heavy investor demand for the 11 million shares. Were the shares to price at the top end of the current range and all overallotments are exercised, the deal would raise gross proceeds of $303.6 million, according to terms in the filing.
It was not immediately known when Orbitz will debut, but it will have 11.6 million Class A shares outstanding when the IPO is completed.
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