The private equity firms Apollo Global Management and Silver Lake are in discussions to invest more than $1bn and receive board seats at the online-booking company Expedia, whose shares have been hit as the global coronavirus outbreak puts a pause on travel.
Expedia and the investors are close to finalising the deal, which could be announced later this week, according to people briefed on the discussions. The company, led by Barry Diller, chairman of IAC, is also considering selling debt in addition to the new equity.
Travel companies have rushed to shore up their finances following a sharp drop in revenues due to coronavirus, which has suspended air travel and holiday bookings. The struggling cruise operator Carnival raised $6.3bn in debt and equity from investors this month following high-profile breakouts of the virus on its ships.
Silicon Valley-based Silver Lake has recently been active in several prominent deals, including a combined $2bn debt and equity financing in the travel accommodation group Airbnb and a convertible note investment in social media company Twitter.
Private equity groups are sitting on record amounts of cash, with some raising additional funds to capitalise on companies effected by coronavirus.
Simultaneously, several US-listed companies are seeking financing avenues, given the hit to their revenues, and are increasingly willing to sell discounted stocks to private equity groups.
Listed companies have raised about $17bn this year up until April 8 from so-called private investments in public equity, almost double the amount compared with the same period last year, according to PrivateRaise data.
Shares in Expedia have fallen by more than half since late February as investors brace for hits to its portfolio of businesses, including Hotels.com, Travelocity and Vrbo. The company withdrew 2020 guidance last month, saying the coronavirus outbreak had created uncertainty in the travel business and would have a larger than expected financial impact.
JPMorgan and Moelis are advising on the transaction, which was first reported by The Wall Street Journal.
Expedia, Apollo and Silver Lake declined to comment.
Additional reporting by Eric Platt in New York