* Travelzoo has received takeover interest -sources
* Travelzoo looking to hire financial adviser -sources
* Firm’s market cap $336 mln; shares down 75 pct since July
By Nadia Damouni
NEW YORK, April 11 (Reuters) – Travelzoo Inc, a
publisher of travel newsletters and websites that has seen its
shares plunge 75 percent since July last year, is planning to
sell itself, three people familiar with the matter said.
The New York-based Internet company, which provides travel
deals on flights, hotels, vacation packages and cruises, is in
the process of hiring a financial adviser, the sources said. The
company has a market value of $336.1 million.
Travelzoo’s move comes after it received takeover interest
from private equity firms and trade buyers, the sources said.
The list of potential buyers could include Amazon
and Google Inc, which bought travel technology company
ITA Software last year, said Dan Kurnos, a research analyst as
The Benchmark Company.
The sources said online travel website ODIGEO, which is
owned by AXA Private Equity and Permira, could also be a likely
buyer.
Travelzoo, Amazon and Google declined to comment. AXA and
Permira were not immediately available for comment.
The shares of Travelzoo, which competes with Expedia Inc
, Priceline.com Inc and Groupon Inc,
have been hurt by at least two quarters of disappointing results
over the last nine months.
In July 2011, Travelzoo saw its shares plunge more than 30
percent after it missed analysts estimates, hurt by higher costs
and lower-than-expected growth at its European newsletter
business.
Recently, Travelzoo entered the local deals market, allowing
subscribers to purchase vouchers from local businesses such as
spas, hotels and restaurants, and putting it in direct
competition with online coupon websites such as Groupon.
But Travelzoo’s more than 24 million subscribers in North
America, Europe and Asia-Pacific, and its depressed stock price,
could prove to be an attractive proposition for buyers.
“Travelzoo comes with a built in subscriber base and you are
getting a business that is probably growing 10 percent to 15
percent even in challenging economic times,” Benchmark’s Kurnos
said. “It makes sense for them to be acquired by somebody,
especially given the success that Groupon has had with
getaways.”
Travelzoo is controlled by Ralph Bartel, who founded the
company in 1998 and serves as a director with a 53.3 percent
ownership. His brother Holger Bartel is Travelzoo’s chairman.
The company’s revenues are generated primarily from
advertising fees.
In 2011, the company reported $148 million in revenue for
the year ending December 31, up from $112 million over the same
period during the previous year.
(Reporting By Nadia Damouni; additional reporting by Alistair
Barr in San Francisco; Editing by Paritosh Bansal and Matt
Driskill)
