Gurugram-based online travel agency and travel search engine, Yatra Online Inc has announced that it is terminating the pending merger agreement with US-Based software firm Ebix Inc
Gurugram-based online travel agency and travel search engine, Yatra Online Inc has announced that it is terminating the pending merger agreement with US-Based software firm Ebix Inc. The merger agreement, signed in 2019, for an enterprise value of $337.8 million (over Rs 2,300 crore) has not just been called off, but Yatra has also gone ahead and sued Ebix over breach of agreement, news agency PTI reported. The travel sector player, listed on NASDAQ, has seen its stock price fall 53% since the beginning of this year.
Yatra Online is seeking substantial damages from Ebix for the alleged breach of the agreement. The company, “has provided notice of termination of its pending merger agreement with Ebix Inc and filed litigation in the Court of Chancery of the State of Delaware over Ebix’s breaches of the merger agreement,” Yatra Online Inc said in a statement. Ebix, according to yatra Online, breached its representations, warranties and covenants in the merger agreement and an ancillary extension agreement. “As detailed in the complaint, Ebix’s conduct breached material terms of the agreements and frustrated Yatra’s ability to close the transaction and obtain the benefit of Yatra’s bargain for Yatra’s stockholders,” Yatra Online Inc said.
Earlier in May, Yatra Online, in a filing to the US Securities and Exchange Commission, had said that the outside date for both the parties to reach an agreement on the merger was being extended to June 4. “Pursuant to the Fourth Extension Agreement, the Outside Date has been further extended to June 4, 2020 in order to provide the parties with time to determine whether they can reach mutual agreement on an amendment of certain terms of the Merger Agreement,” it said. The $337.8 million deal to acquire Yatra Online was at a staggering 84% premium to Yatra Online’s closing share price of $3.80 as of March 8, 2019.
The travel firm, based out of Gurugram is among the major players in the online travel sector. Yatra not only helps travellers book air tickets, domestic and international hotels but offers homestays, holiday packages, rail ticketing and even bus ticket booking. In a separate statement, Yatra Online Inc said, as of June 4, 2020, the company had $32.5 million (over Rs 240 crore) in total available liquidity and its current monthly run-rate operating fixed cost was approximately $1.2 million (over Rs 8 crore).