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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
OCTOBER 4, 1999
Date of Report (Date of earliest event reported)
SABRE HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-12175 75-2662240
(State or other (Commission File No.) (IRS Employer
jurisdiction of incorporation) Identification No.)
4255 AMON CARTER BLVD.
FORT WORTH, TEXAS 76155
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 963-6400
THE SABRE GROUP HOLDINGS, INC.
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On October 3, 1999, Sabre Inc., the operating subsidiary of Sabre
Holdings Corporation (the "Registrant"), together with other wholly-owned
subsidiaries, entered into an an Agreement and Plan of Merger (the "Merger
Agreement") with Preview Travel, Inc. ("Preview"). The Merger Agreement
provides, among other things, that (a) Sabre Inc. will contribute all of the
assets relating to its Travelocity.com business to a limited partnership,
Travelocity.com LP; (b) Preview will merge with and into a Sabre Inc. merger
subsidiary, Travelocity.com Inc.; (c) Preview public shareholders will exchange
their shares for shares of Travelocity.com Inc.; (d) following the merger,
Travelocity.com Inc. will contribute all of its assets to Travelocity.com LP;
and (e) Travelocity.com LP will operate the combined business of Preview and
Travelocity. The Merger Agreement is described further in the Exhibit.
On October 3, 1999, Travelocity Holdings, Inc., a wholly-owned
subsidiary of Sabre Inc., entered into an Interactive Services and Exclusive
Channel Agreement (the "AOL Agreement") with America Online, Inc. ("AOL").
The AOL Agreement provides, among other things, that (a) Travelocity
Holdings, Inc. will be the exclusive reservations engine for AOL's internet
properties; (b) required payments will be made to AOL and advertising revenue
and commissions will be shared; and (c) the term of the agreement is five
years and may be extended under certain conditions. The Merger Agreement is
described further in the Exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibit are filed herewith:
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Exhibit No. Description of Exhibit
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99.1 Press release dated October 4, 1999 "Sabre's
Travelocity to Merge with Preview Travel,
Establishing Clear Leader in Online Travel".
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SABRE HOLDINGS CORPORATION
By: /s/ Andrew B. Steinberg
Name: Andrew B. Steinberg
Title: Executive Vice President, General
Counsel and Corporate Secretary
Date: October 4, 1999
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EXHIBIT INDEX
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Exhibit No. Description of Exhibit
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99.1 Press Release dated October 4, 1999 entitled "Sabre's
Travelocity to Merge with Preview Travel,
Establishing Clear Leader in Online Travel"
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[LOGO] [LOGO] [LOGO]
SABRE'S TRAVELOCITY.COM AND PREVIEW TRAVEL TO MERGE,
ESTABLISHING CLEAR LEADER IN ONLINE TRAVEL
- - MERGER CREATES THE LEADING ONLINE TRAVEL SERVICE IN THE LARGEST RETAIL
E-COMMERCE CATEGORY, WITH A COMBINED REGISTERED MEMBERSHIP BASE OF 17
MILLION AND MORE THAN $1 BILLION IN PROJECTED 1999 TRAVEL SALES.(1)
- - NEW ENTERPRISE TO BUILD UPON STRATEGIC PARTNERSHIPS WITH MAJOR INTERNET
PORTALS INCLUDING AMERICA ONLINE/NETSCAPE, YAHOO!, LYCOS, GO NETWORK,
EXCITE, @HOME AND COMPUSERVE.
- - SABRE TO OWN 70 PERCENT STAKE IN THE COMBINED ENTITY; EXISTING PREVIEW
TRAVEL STOCKHOLDERS TO HOLD 30 PERCENT. TRANSACTION STRENGTHENS SABRE'S
LEADERSHIP POSITION AS THE NUMBER ONE GLOBAL TRAVEL DISTRIBUTION SYSTEM FOR
THE INTERNET.
FORT WORTH, TX and SAN FRANCISCO, CA - Oct. 4, 1999 - Sabre Holdings Corporation
(NYSE: TSG) and Preview Travel, Inc. (NASDAQ: PTVL) today announced the creation
of a new company that combines Sabre's Travelocity.com division with Preview
Travel. The transaction creates the clear leader in online travel, a new company
that will be known as Travelocity.com. Sabre will retain 70 percent ownership of
the new company with the remaining 30 percent owned by Preview Travel
stockholders. The new company will benefit from a new, five-year contract with
America Online, Inc. that makes Travelocity.com the exclusive reservations
engine for all travel-related services within the AOL service, AOL.COM,
CompuServe, Digital City and Netscape, and provides Travelocity.com with a share
of specified travel-related advertising revenues. In addition, Yahoo! Inc. has
extended its existing contract with Travelocity.com and has agreed to invest in
the new entity.
The merger creates a new powerhouse in the online travel market, the largest
retail e-commerce category, projected to grow from $7.8 billion in 1999 to $32.1
billion by 2004.(2) The new, combined company will have more than 17 million
registered memberships and more than eight million unique monthly visitors -
making it 50 percent
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(1) Travel sales are the aggregate dollar values of the total amounts paid by
consumers for air, car, hotel, vacation and cruise products, net of
cancellations.
(2) Forrester Research
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SABRE'S TRAVELOCITY.COM AND PREVIEW TRAVEL TO MERGE
October 4, 1999
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larger than the next largest online travel agency site.(3) Travelocity.com will
have established distribution relationships with America Online/Netscape,
Yahoo!, Lycos, Go Network, Excite, @Home and CompuServe, among other leading
Internet sites. Combined travel sales for the two companies in the first half of
1999 totaled more than $467 million. The new company is projected to be the
third largest e-commerce site after Amazon.com and eBay(4), and one of the top
ten travel agencies based on 1999 booking estimates.(5)
At the close of the transaction, the combined business will be headquartered in
Fort Worth, Texas, with a significant operating presence in San Francisco.
Terrell B. Jones, president of Travelocity.com, will be the president and chief
executive officer of the new company. Donald J. Carty, chairman of Sabre Inc.,
will serve as chairman of the board until a new Sabre chief executive officer is
named. James Hornthal, founder and chairman of Preview Travel, Inc., will serve
as vice chairman.
"The new Travelocity.com will bring together the very best of Travelocity and
Preview Travel - two successful and talented organizations - to create an
unparalleled combination of content and innovative services to online
consumers," Terrell B. Jones said. "We've long admired the Preview Travel site
for the experience it provides consumers. Going forward, as the leader in online
travel, our focus will continue to be on providing the best shopping
opportunities and customer support available anywhere - online or offline."
"Bringing together the innovative technology solutions of Sabre's
Travelocity.com with Preview Travel's effective integration of content,
community, commerce and world-class customer service will benefit our customers
and our partners," James Hornthal said. "We expect the additional scale that we
will achieve throughout the enterprise to translate into long-term consumer and
stockholder value."
AMERICA ONLINE AGREEMENT
At close of the merger transaction between Travelocity and Preview Travel,
Travelocity.com will have a new five-year agreement with America Online. Under
the new deal, the new Travelocity.com will be the exclusive reservations engine
for all travel-related services within the AOL service, AOL.COM, CompuServe,
Digital City and Netscape. The AOL agreement will allow users to access the same
set of travel reservations services from each of these AOL brands, providing a
consistent and seamless experience from multiple access points. The agreement
also calls for a unique revenue sharing structure designed to reward both
companies based on the success of their trend-setting partnership. AOL will
share in commissions on travel sales and Travelocity.com will share in
advertising revenue.
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(3) Travelocity.com currently has 8.7 million members and 4.1 million monthly
unique visitors. Preview Travel currently has 9 million members and 4.1
unique monthly visitors (WWW only), according to Media Metrix, July 1999.
(4) Media Metrix, July 1999
(5) Travel Weekly's annual U.S. Travel Agency Survey
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SABRE'S TRAVELOCITY.COM AND PREVIEW TRAVEL TO MERGE
October 4, 1999
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YAHOO! AGREEMENT
Sabre also announced that it has agreed on terms with Yahoo! Inc. for an
extension of the existing contract, strengthening the relationship between
Travelocity.com and Yahoo! Travel, Yahoo!'s comprehensive resource for
researching, planning and booking travel. The agreement will be contributed to
the new Travelocity.com as part of the merger. Yahoo! has also agreed to make a
minority investment in the new company, demonstrating additional support of the
ongoing relationship with Travelocity.com.
MERGER STRUCTURE
Sabre will contribute the assets of Travelocity.com plus $50 million in cash in
exchange for 70 percent ownership in the new company, formed as a Delaware
limited partnership. Current Preview Travel stockholders will hold 30 percent of
the combined entity through a new corporate entity, Travelocity.com Inc. At the
close of this transaction, Preview Travel shares will convert 1:1 into shares of
the new company, and Travelocity.com Inc. will trade under the symbol TVLY on
the NASDAQ National Market System.
The merger has been approved by both Sabre and Preview Travel boards of
directors, and is expected to close in first quarter 2000. The transaction is
subject to regulatory approval, customary closing conditions and requires
approval by Preview Travel's stockholders.
Preview Travel was advised by Hambrecht and Quist on the transaction, while
Sabre was advised by Goldman Sachs & Co.
SHAREHOLDER BENEFITS
"We have been committed to unlocking the value of Travelocity.com for Sabre's
shareholders," said Donald Carty, chairman of Sabre Inc. "Through the new
ownership structure, we've created a pure Internet play in which our
shareholders will own a majority stake of the third largest e-commerce site. In
addition, this transaction provides Travelocity.com with access to Internet
currency, and at the same time preserves the product development synergies that
exist between Travelocity.com and Sabre."
Once the two sites are fully integrated, the new Travelocity.com will use the
Sabre computer reservations system, strengthening Sabre as the largest processor
of travel transactions on the Internet and the leader in all other channels of
travel distribution. Sabre will consolidate the financial results of the new
company into its own financial reporting and will continue to trade under the
symbol TSG on the New York Stock Exchange. AMR's majority-ownership of Sabre is
unaffected by this transaction.
"Consolidation in growing markets is inevitable. The drive to achieve global
scale is incredibly compelling for us and our strategic marketing partners,"
said Chris Clouser, president and chief executive officer of Preview Travel,
Inc. "By combining resources with Travelocity, we are able to help write the
next chapter in online travel. We expect our clear leadership position will pay
important dividends, now and in the future, for our customers, employees and
shareholders."
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SABRE'S TRAVELOCITY.COM AND PREVIEW TRAVEL TO MERGE
October 4, 1999
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ABOUT TRAVELOCITY.COM
Travelocity.com is one of the largest online travel sites with $301 million in
gross travel sales for the first half of 1999, exceeding the total $285 million
it recorded for all of 1998. Based on last year's sales, it was ranked 19th in
Travel Weekly's 1999 Top 50 U.S. Travel Agency Survey. To date, Travelocity.com
has more than eight million registered members. In March 1996, Travelocity.com
launched at www.Travelocity.com. In the United Kingdom, www.Travelocity.co.uk
launched in November 1998 and in Canada, www.Travelocity.ca launched in April
1999.
Travelocity.com is owned and operated by Sabre. Travelocity.com provides
reservations capabilities for 95 percent of all airline seats sold, more than
42,000 hotels, more than 50 car rental companies and more than 70,000 vacation
packages. This reservations capability is paired with access to a vast database
of destination and interest information.
ABOUT PREVIEW TRAVEL
Preview Travel is a leading online travel site with nine million registered
members and reported gross bookings of $200.1 million in 1998 and $166.7 million
in the first half of 1999. Preview Travel is America Online's primary travel
partner, offering integrated travel content and services to AOL's 18 million
subscribers. It also has relationships with Excite, Lycos, Snap and USA Today,
and has established itself as a leader in online media sales.
Preview Travel provides online travel services for leisure and small-business
travelers. It offers one-stop shopping for airline tickets, vacation packages,
car rentals, hotels and cruises, as well as integrated access to travel
information, merchandise, news and world-class customer service.
ABOUT SABRE
Sabre is a world leader in the electronic distribution of travel and is a
leading provider of information technology solutions for the travel and
transportation industries, including customized software development and
software products, transaction processing, consulting, and total information
technology outsourcing. Additional information on Sabre is located on the world
wide web at www.Sabre.com. Sabre and the Sabre logo are registered trademarks of
an affiliate of Sabre Inc.
Statements in this news release about anticipated or expected future revenue and
earnings growth are forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. All forward-looking
statements in this release are based upon information available to Sabre and
Preview Travel on the date of this release. Any forward-looking statements
involve risks and uncertainties that could cause actual events or results to
differ materially from the events or results described in the forward-looking
statements. Sabre and Preview Travel undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements.
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SABRE'S TRAVELOCITY.COM AND PREVIEW TRAVEL TO MERGE
October 4, 1999
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CONTACTS:
Sabre Inc. Travelocity.com Preview Travel
Barbara Kieker Dawn Caesar Scott Radcliffe
Sabre Vollmer Public Relations Preview Travel
Tel: 817-931-9503 Tel: 713-546-2230 Tel: 415-439-1370
[email protected] [email protected] [email protected]
Travelocity.co.uk Travelocity.ca
Matt Priddle Jacque Rardin
Companycare Vollmer Public Relations
Tel: 44-118-939-5900 Tel: 713-546-2230
[email protected] [email protected]
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