THE planned US$900 million recapitalisation of American Express Global Business Travel (TD 19 Dec 2019) appears unlikely to go ahead, after the COVID-19 downturn saw the withdrawal of private equity firm Carlyle Group and Singapore-based GIC from the deal.
The transaction, which would have seen Carlyle and GIC take a 20% stake in Amex GBT, is now the subject of court action as the travel management giant attempts to compel the investors to finalise their agreement.
A share purchase pact indicates the deal was set to close on 07 May, but the purchasers are now claiming that the coronavirus pandemic has triggered a Material Adverse Effect clause due to the “significant decimation of the financial conditions and results of operations of GBT”.
Significant cost-cutting in response to COVID-19 means GBT is no longer operating in the “ordinary course of business,” the purchasers contend.
Existing investors in GBT include private equity firm Certares – which also holds a stake in AmaWaterways alongside APT Travel Group founder Geoff McGeary – as well as a Qatar sovereign wealth fund.
The company has asked for an expedited trial to compel settlement, but this was denied and a hearing to test the basis for terminating the transaction is now scheduled for 20 Jul.
The proposed investment valued Amex GBT overall at around US$5 billion.
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Source: traveldaily