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To: pater tenebrarum who wrote (577)	4/1/1999 5:33:00 PM
From: Curbstone	Respond to of 728

Sabre May Find IPO for Travelocity Hard to Resist Bloomberg News April 1, 1999, 1:28 p.m. PT Fort Worth, Texas, April 1 (Bloomberg) -- Sabre Inc. may find the lure of an Internet stock offering hard to resist. The company, which runs the world's largest computerized reservation system for travel agents, also owns Travelocity.com, among the biggest online airline booking services on the Net. Sabre President Michael Durham says Travelocity is an important contributor to Sabre's reservation business. That contribution is coming under greater scrutiny, though, after rival Internet travel service Priceline.com Inc.'s shares soared more than fivefold since going public Tuesday. ''If you have a successful Internet company, given today's values, you're a fool if you don't consider alternative ownership structures,'' said Samuel Buttrick, an airline analyst at PaineWebber Inc. Almost 83 percent of Fort Worth, Texas-based Sabre's shares are held by its former parent company, AMR Corp., which also owns American Airlines, the second-biggest U.S. air carrier. Travelocity's $285 million in 1998 revenue was about eight times Priceline's. Based on Priceline's new-found market value of $11.5 billion, Buttrick estimates Travelocity's is worth at least $5 billion. ''Whatever the value is, it's most certainly not reflected in the value of Sabre,'' he said. Each $1 billion in Travelocity's value would contribute about 7 1/2 points to Sabre's stock price, he estimates. The rise in Sabre would increase AMR's value as well, he said. Sabre rose 1 1/8 to 46 1/2. The stock has increased 27 percent during the past year. Priceline fell 2 3/8 to 80 1/2, after going public at 16. The New Sabre The focus on Travelocity comes a week after Sabre unveiled a restructuring that combined its travel reservation and computer services division, yet kept Travelocity a separate unit. ''Travelocity is at a different stage of development than our other businesses,'' Durham said. ''We felt that a more separate organizational structure would be more advantageous.'' Several analysts and investors, though, said the new structure appears to prepare Travelocity for a spinoff. The surge in Priceline's shares and the rise of other Internet ticket sites such as Cheap Tickets Inc., which has a market value of about $662 million after going public two weeks ago, may create a new problem for Sabre. ''Those two now have a lot more cash than I think Sabre would be willing to lose on Travelocity,'' said Nicholas Moore, senior technology analyst for Jurika & Voyles Inc. in Oakland, California, which owns about 6 percent of Sabre's common stock. To compete with those sites, as well as other outlets such as Microsoft Corp.'s Expedia, Sabre will have to spend aggressively on Travelocity, which could undermine the performance of its other businesses, Moore said. ''It may be called upon to have accelerated losses in the name of accelerated revenue growth,'' Moore said. ''It's either not going to get the resources it needs or it's going to destroy the rest of Sabre."