March 26, 2018 / 3:40 PM / 6 months ago

Elliott says could buy Travelport, buys 12 percent stake

March 26 (Reuters) - Activist hedge fund Elliott Management Corp on Monday asked Travelport Worldwide Ltd to pursue a sale and said it could be a potential buyer as it disclosed a nearly 12 percent stake in the travel software company.

The move is the latest example of how Elliott uses its private equity arm, Evergreen Coast Capital Partners, to pressure companies to explore a sale. Elliott successfully used the strategy on LifeLock, which was later sold to Symantec Corp .

Elliott will encourage Travelport to launch the sale process and seek to participate, the fund said on Monday in a filing with the U.S. Securities and Exchange Commission.

Elliott has held talks with investment banks to raise financing for a potential bid, according to sources familiar with the matter who requested anonymity to discuss confidential deliberations.

Representatives for Elliott and Travelport declined to comment.

Shares in Travelport jumped 8.6 percent to $15.59, giving the company a market capitalization of around $2 billion.

If Elliott is successful in buying Travelport, it could represent the largest leveraged buyout the fund has led, rather than in collaboration with other private equity firms.

Elliott's first acquisition of a public company, the $1.6 billion takeover of network software firm Gigamon Inc, closed late last year. As with Travelport, Elliott had pushed Gigamon to sell itself by offering to buy it.

While activist investors such as Carl Icahn have made offers to buy companies before, New York-based Elliott, with assets of more than $33 billion, is the biggest hedge fund with a dedicated team chasing buyouts.

Travelport, based in Britain but traded in the United States, is no stranger to private equity. Blackstone Group LP acquired Travelport along with Technology Crossover Ventures for $4.3 billion in 2006 and took it public in 2014. It is now trading below its 2014 IPO price of $16.

Travelport had about $2.4 billion in net revenue last year. Its main rivals, Sabre Corp and Amadeus IT Group SA , have both been owned by private equity firms before. (Reporting by Liana B. Baker in New York Editing by Jeffrey Benkoe)

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