An unknown investment group called ChaPaVe Partners late last week announced it was making a “tactical tender offer” to buy hundreds of thousands of shares of stock in online travel and entertainment deals company Travelzoo, but the mysterious nature of the offer is being questioned.
ChaPaVe’s offer is “for up to 1,500,000 shares of the outstanding shares of Travelzoo Inc. common stock subject to certain conditions,” but those conditions are only spelled out in a brief press release. The tender price is $40 per share, and the 1.5 million shares represents about 9 percent of the company.
Shares of Travelzoo stock trade under the symbol TZOO, and shares rose on Friday, September 9, following the issuing of the press release, but today, September 12, shares were trading down slightly from the Friday close of $32.25 at $31.93 at about 1:35 p.m. EDT.
Travelzoo offers travel and entertainment deals — such as Broadway and theater tickets — to its subscribers, who number more than 24 million.
Some media reports questioned the offer and speculated that ChaPaVe might be trying to hype the stock to drive up its price, but according to Forbes, based on a conversation with New Jersey attorney Read Rankin, who represents ChaPaVe, the partnership currently does not own any Travelzoo stock.
Rankin did not immediately return a message seeking comment, and ChaPaVe also did not respond to a request for comment.
Among ChaPaVe’s conditions for the offer include meeting with Travelzoo executives and board of directors “to complete due diligence,” ChaPaVe also obtain financing for the deal no later than October 18. In addition, ChaPaVe retains the right to back out of the offer “if Travelzoo experiences any material adverse change in its business or if there is a material change of its share price as of the date of this announcement.”
Travelzoo’s marketing director Christie McConnell did not return a message seeking comment, but the company’s CEO Chris Loughlin is quoted by Reuters and other publications as stating that Travelzoo has not been in contact with representatives from ChaPaVe.
“We have not had any contact with this company and cannot comment on this matter,” Loughlin said.
According to Rankin, ChaPaVe was recently established by a “seasoned and experienced” investor and businessman, but he declined to identify who is in the partnership.
“He’s not some huckleberry from Wisconsin,” Rankin told Forbes about the chief investor.
“Assuming the remaining shares are successfully tendered to ChaPaVe, Travelzoo will be in a position to examine a going private initiative with ChaPaVe because they have a longer-term strategic view,” ChaPaVe said in a statement.