Less than one week after Sabre called off its merger with Farelogix, there’s yet another cancelled acquisition in the travel industry.
As part of its first-quarter earnings release today, WEX says it will not continue with plans to purchase eNett, Travelport’s payments business, and virtual card issuer Optal.
WEX had announced the USD 1.7 billion purchase deal in January, agreeing to pay USD 1.275 billion in cash and the rest in common stock to Travelport and its owners, Siris Capital Group and Elliot Management Corporation for eNett and to private shareholders for Optal.
But in a call today with analysts to discuss the financial report, WEX chair and CEO Melissa Smith says the deal is off.
“We’ve concluded that the pandemic and the conditions arising in connection with it have had and continue to have a material adverse effect on the businesses of eNett and Optal,” she says.
In response, Travelport, eNett and Optal released a joint statement that they “reject WEX’s attempt to walk away from its binding agreement” and intend to hold WEX to the deal.
The three companies say the COVID-19 virus had already begun to spread across the globe when the deal was signed on January 24 and the agreement “expressly excludes the effects of a pandemic from the definition of Material Adverse Effect. In addition, the definition of Material Adverse Effect also excludes the effects of any changes in laws or regulations, such as governmental travel restrictions. WEX therefore assumed all of these risks when it signed the Purchase Agreement.”
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