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US investors circling to buy Travelport

A consortium including activist investment firm Elliot Management is reportedly in talks to acquire the GDS.

A consortium is close to buying GDS firm Travelport, the news agency Reuters reports, with the private equity group Siris Capital and hedge fund Elliot Management “nearing an agreement”.

Elliot Management is understood to have been chasing Travelport for much of this year, ever since it disclosed a 12% stake in March.

Sources say a deal could be concluded as soon as next week. However, Siris, Elliot and Travelport all declined to comment when approached by Reuters.

The platform is one of a handful of leading GDS operators, along with Amadeus, Sabre and Galileo, with a strong position in the UK and Europe.

However, the distribution sector is dominated globally by Amadeus with around 44% market share, followed by Sabre with around 37%.

Travelport has recently increased its presence in Asia and Europe, and signed a deal with G Travel in May. But in the same month it lost its contract with the Australian travel agent giant Flight Centre, which signed up with Sabre instead.

The company dates to 1971 when it created one of the world’s first computerised airline reservation systems, which later evolved into the GDS that is used today by airlines, travel agents and tour operators. Its market capitalisation stands at around $1.9 billion.

Unlocking value
Elliott is run by Paul Singer, a well-known activist investor. Elliott is understood to have already asked Travelport’s management to consider options such as unlocking the value of its payments unit eNett.

It says that Travelport “possesses a fast growing and strategic business in the travel payments industry,” but a deal will likely push Travelport to consider the sale of certain businesses or assets, the travel news site Skift reports.

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