Travelzoo Inc. (NASDAQ:TZOO), a global Internet media company, today
announced that the Company intends to execute the shareholder approved
reverse/forward stock split during the second or third week of November,
subject to receiving an updated fairness opinion from an independent
financial advisor and final approval by the Special Committee of its
Board of Directors.
As previously disclosed on June 11, 2013, Travelzoo had formed a Special
Committee of its Board of Directors, consisting of three independent
directors, to evaluate a reverse/forward stock split transaction, which
has since been approved by shareholders at the Company’s annual
shareholder meeting. The proposed reverse/forward stock split
transaction consists of a 1-for-25 reverse stock split of the Company's
outstanding common stock, followed immediately by a 25-for-1 forward
stock split (collectively referred to as the “reverse/forward split”). A
description of the terms and conditions of the reverse/forward split was
set forth in Travelzoo’s definitive Proxy Statement for the 2013 annual
shareholders meeting filed with the US Securities and Exchange
Commission on July 25, 2013. On September 12, 2013, at the Company’s
annual shareholders meeting, Travelzoo shareholders voted in favor of
the reverse/forward split, with the transaction receiving the votes of
both (A) a majority of the issued and outstanding shares of common stock
and (B) a majority of the issued and outstanding shares of common stock
that are not held or controlled, directly or indirectly, by directors or
officers of the Company, including, without limitation, the shares held
by Azzurro Capital Inc., our principal stockholder.
If approved, the reverse/forward stock split is intended to
substantially reduce Travelzoo’s shareholder account administration
costs.
To the extent the reverse/forward split is executed, approximately
655,000 of the Company’s outstanding shares will be fractionalized.
Shareholders holding less than 25 shares of common stock immediately
prior to the reverse split will not receive fractional shares in the
reverse stock split, but will instead have their shares converted into
the right to receive a cash payment in exchange for and in proportion to
the fractional share interests resulting from the reverse stock split.
To fund the cash payment, the fractional share interests will be
aggregated by the Company’s transfer agent who will sell aggregated
shares in the open market following the execution date. The Company
intends to impose certain trading restrictions to the transfer agent in
order to reduce the impact of the open market sale onto the Company’s
stock price.
The Special Committee engaged Duff & Phelps, LLC as financial advisors
to review the fairness of the transaction. The Special Committee will
only approve the transaction after receiving an opinion from a financial
advisor regarding the fairness of the transaction from a financial point
of view to the Company's shareholders whose positions, individually
considered, consist of fewer than 25 shares, of the per-share
consideration to be received by such shareholders in the reverse/forward
split. The Special Committee has received legal counsel from Young
Conaway Stargatt & Taylor, LLP in connection with their review of the
proposed transaction. In addition, the Company received legal counsel
from Skadden, Arps, Slate, Meagher & Flom LLP and Bryan Cave LLP in
connection with the proposed transaction.
Shareholders who held less than 25 shares immediately prior to the
reverse stock split will receive a cash payment based on and equal to
their resulting fractional interest times the price of a share equal to
the higher of (a) the trailing ten day average trading price of the
Company’s common stock immediately preceding the consummation date of
the reverse/forward split or (b) the average aggregate sales price
received in the sale on the open market of the shares resulting from
aggregation of the fractionalized interests. Shareholders that held 25
or more shares of common stock immediately before the reverse/forward
split will not receive a cash payment, but continue to hold the same
number of shares after completion of the reverse/forward split as they
held immediately prior. The Company anticipates no changes in the total
number of outstanding shares of common stock as a result of the
reverse/forward split.
This press release is only a disclosure and description of the intended
transaction and is not an offer to sell or acquire any shares of common
stock. The Company has included further disclosure of this transaction
in its definitive proxy statement previously filed with the US
Securities and Exchange Commission.
About Travelzoo
Travelzoo Inc. is a global Internet media company. With more than 26
million subscribers in North America, Europe, and Asia Pacific and 25
offices worldwide, Travelzoo® publishes deals from more than 2,000
travel and entertainment companies. Travelzoo's deal experts review
offers to find the best deals and confirm their true value. In Asia
Pacific, Travelzoo is independently owned and operated by Travelzoo
(Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with
Travelzoo Inc.
Certain statements contained in this press release that are not
historical facts may be forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities and Exchange Act of 1934. These forward-looking statements
may include, but are not limited to, statements about our plans,
objectives, expectations, prospects and intentions, markets in which we
participate and other statements contained in this press release that
are not historical facts. When used in this press release, the words
“expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”,
“intend”, “plan”, “seek” and similar expressions are generally intended
to identify forward-looking statements. Because these forward-looking
statements involve risks and uncertainties, there are important factors
that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements, including
changes in our plans, objectives, expectations, prospects and intentions
and other factors discussed in our filings with the SEC. We cannot
guarantee any future levels of activity, performance or achievements.
Travelzoo undertakes no obligation to update forward-looking statements
to reflect events or circumstances occurring after the date of this
press release. Travelzoo and Top 20 are registered trademarks of
Travelzoo. All other names are trademarks and/or registered trademarks
of their respective owners.
Copyright Business Wire 2013