Orbitz has refiled their S-1.
sec.gov
PCLN may end up as a good back door play on the Orbitz IPO.
chicagotribune.com
Orbitz public offering is back
United, 4 other founding airlines to share proceeds
By Susan Chandler
Tribune staff reporter
Published August 29, 2003
Orbitz Inc. is again planning to go public.
The Chicago-based online travel agency filed an amended application for an initial public offering Wednesday with the Securities and Exchange Commission.
The application did not provide much detail about how many shares Orbitz wants to sell on the Nasdaq stock market or at what price.
But it did say where the money raised will go. Some of it will go back to the five airlines that founded Orbitz three years ago, while the rest will be deposited into the company's coffers to help it compete with industry giants Expedia Inc. and Travelocity.
Last year, Orbitz put the brakes on a $125 million IPO because of an antitrust investigation by the Department of Justice. Last month, after a three-year probe, the department concluded that Orbitz had not hurt competition in the online travel business. That cleared the offering for takeoff.
The department was looking at whether Orbitz's ownership by rival airlines represented a form of price collusion. Orbitz was founded by United Airlines, Delta Air Lines, Northwest Airlines, Continental Airlines and American Airlines to hold down their distribution costs and create more competition in the rapidly growing online travel game. The sale of shares, which still requires SEC approval, will not affect the airlines' control of Orbitz.
Under a "controlled company" exception to Nasdaq's proposed independence requirements, Orbitz would not have to have a majority of outside, independent directors on its board.
The majority of Orbitz's directors would still come from its founding airlines, according to the application, and those directors would continue to oversee executive compensation and nominations of other directors. They would also have a say over whether Orbitz makes acquisitions or is sold to another company.
An Orbitz IPO would be an ego boost for the Chicago area, which has seen some of its prominent public companies acquired by out-of-towners in recent years.
Meanwhile, few local companies have gone public to help take their place.
Last year, benefits consulting firm Hewitt Associates Inc. in Lincolnshire braved the rocky public markets with a $212 million offering. And in 2001, Philip Morris Cos. sold 16 percent of Northfield-based Kraft Foods Inc. for nearly $9 billion, the second-largest IPO in U.S. history.
Last year, according to the application, Orbitz racked up $175.5 million in revenue and trimmed its net loss to $17.9 million from $103.2 million in 2001. For the first six months, Orbitz has lost $5.3 million, compared with a $16.5 million loss in the same period last year.
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