American Express Global Business Travel (Amex GBT) has announced an amended merger agreement with CWT, which includes some significant changes from the original terms agreed upon. The revised CWT transaction value now stands at approximately $540 million, down from the initially agreed $570 million. This adjustment is made on a cash-free, debt-free basis and is expected to keep the 2024 adjusted EBITDA multiple in line with the previously announced figures.
Furthermore, the fixed stock price for the shares of Amex GBT to be received as part of the consideration under the merger agreement has been revised to $7.50 per share, up from the initial $6.00 per share. As a result, Amex GBT now expects to issue approximately 50 million shares of its class A common stock, down from the previously anticipated 72 million shares. The company plans to use cash on hand to fund the remaining transaction consideration, which remains unchanged at $70 million, and the retirement of CWT debt.
The amendment also extends the drop dead date, as defined in the merger agreement, to December 31, 2025, providing the parties with additional time to address the lawsuit filed by the Antitrust Division of the U.S. Department of Justice in January 2025 seeking a permanent injunction to prevent the proposed transaction.
Eric J. Bock, Amex GBT’s Chief Legal Officer and Global Head of M&A, expressed confidence in the merits of their position in the lawsuit, while also highlighting the reduction in the shares to be issued in the transaction as reflective of their continued belief in the value of their equity. He emphasized the company's strong and flexible balance sheet, coupled with their $300 million share buyback program, as evidence of their commitment to creating value for shareholders.
The closing of the transaction remains subject to the satisfaction of customary closing conditions, including the receipt of certain regulatory approvals.
As a result of these announcements, the company's shares have moved -1.7% on the market, and are now trading at a price of $7.61. For more information, read the company's full 8-K submission here.
