TripAdvisor acquisition effectively 19% buyback, says DA Davidson

DA Davidson analyst Tom White keeps a Neutral rating on TripAdvisor (TRIP) after the company announced plans to acquire Liberty TripAdvisor Holdings (LTRPA) for a total merger consideration of $435M. The deal is effectively a buyback of 19% of TripAdvisor’s common stock “at a reasonable price,” the analyst tells investors in a research note. The firm believes acquisition simplifies TripAdvisor’s corporate structure -and will align the voting power and economic ownership for all shareholders. TripAdvisor management should have more strategic flexibility as well as one less distraction as the company tries to turnaround its legacy branded Tripadvisor.com business and maximize value at Viator, contends DA Davidson. The firm also sees potential expansion of TripAdvisor’s investor base and the possibility of additional index inclusion.