Ebix offers to buy Yatra for $336 million
The offer by US firm is at 84% premium to travel portal’s closing share price of $3.80 on March 8
Ebix said that it would pay for Yatra Online at its discretion either in cash or by issuing Ebix stock, which will be converted at its 10-day average price at the time of closing the deal, or $59 per share, whichever is higher. Ebix stock traded at $50.67 per share on the Nasdaq at the time of going to press. Listed on the Nasdaq in New York, Yatra Online, Inc. is the parent company of Gurugram-based Yatra Online Pvt Ltd which was founded in 2006 and operates the travel website Yatra.com.
At $7 a share, the offer for approximately 48 million outstanding diluted shares of Yatra Online amounts to 84% premium to the travel portal’s closing share price of $3.80 on March 8. On Monday, after Ebix made its offer public, the Yatra stock appreciated 40% to trade at $5.39 per share at the time of going to press.
“If you are a listed company, you are always on the block. We needed to make a very compelling offer while at the same time keep the interests of Ebix shareholders in consideration,” Robin Raina, chairman and CEO of Ebix, told ET over the telephone. “If the deal goes through, Ebix shareholders will get additional earnings per share (EPS) of 25-to-30 cents.”
Raina described the bid as “a very pragmatic offer” based on the 12-month and 24-month average prices of the Yatra stock, and the company’s future path to profitability.
“All I can say is that we made an offer and have given them a deadline of one week,” said Raina. He declined to comment on whether it is an unsolicited offer. Ebix in a statement said that if the Yatra board does not respond within the stipulated period (one week), Ebix reserves the right to reduce the offer at its discretion.
Yatra earned revenues of $188 million in FY18, but posted a net loss of $62 million. Raina expects that Yatra Online will generate revenues upward of $150 million (Rs 1,048 crore) a year with more than 30% operating margins within 6 months of acquisition, bringing the additional EPS for Ebix shareholders.
With the acquisition of Yatra, Ebix expects to breach the $4-billion (Rs 27,936-crore) mark in GMV, he said.