American Express Global Business Travel Announces Private Stock Repurchase

Rhea-AI Summary

American Express Global Business Travel (NYSE: GBTG) has announced a private stock repurchase of 8,000,000 shares of its Class A common stock during Q3 2024. The repurchase was made from a single stockholder at approximately $6.85 per share, totaling about $55 million. This represents roughly 1.7% of outstanding shares as of June 30, 2024.

The transaction was funded by cash on hand and unanimously approved by the company's Board of Directors. CFO Karen Williams cited positive and accelerating Free Cash Flow and successful debt refinancing as enabling factors, stating it demonstrates confidence in their long-term strategy.

Positive

• Repurchased 1.7% of outstanding shares, potentially increasing shareholder value
• Funded by cash on hand, indicating strong liquidity position
• Positive and accelerating Free Cash Flow reported
• Successful debt refinancing completed

Negative

• Outlay of $55 million in cash, which could have been used for other strategic initiatives

Insights

Financial Analyst

The private repurchase of 8 million shares for $55 million at $6.85 per share is a strategic move by Amex GBT. This action, representing 1.7% of outstanding shares, signals management's confidence in the company's valuation and future prospects. The repurchase at a specific price point suggests the company views its stock as undervalued. Notably, the use of cash on hand for this transaction indicates strong liquidity position. The CFO's statement about "positive and accelerating Free Cash Flow" is particularly encouraging, implying improved operational efficiency and potential for future shareholder returns. However, investors should consider the impact on earnings per share and monitor how this affects the company's cash reserves for future growth initiatives.

Market Research Analyst

This stock repurchase by Amex GBT is a calculated move in the current market environment. With the travel industry recovering post-pandemic, the company's confidence in its "longer-term strategy" suggests positive internal forecasts. The private nature of the transaction is intriguing, potentially indicating a strategic realignment of ownership structure. The $6.85 per share price offers a benchmark for market valuation. Investors should watch for any shifts in institutional ownership following this repurchase. The successful debt refinancing mentioned by the CFO is another positive indicator, likely resulting in improved interest terms and financial flexibility. This combination of share repurchase and debt management could position Amex GBT more favorably in the competitive B2B travel and expense management sector.

NEW YORK--(BUSINESS WIRE)-- American Express Global Business Travel, which is operated by Global Business Travel Group, Inc. (NYSE: GBTG) (“Amex GBT” or the “Company”), a leading B2B software and services company for travel, expense, and meetings & events, today announced that during the third quarter of 2024, the Company repurchased 8,000,000 shares of its Class A common stock from a stockholder of the Company in a privately negotiated transaction at a purchase price of approximately $6.85 per share, or approximately $55 million in aggregate. The stock repurchase was funded by the Company’s cash on hand and was unanimously approved by the Company’s Board of Directors. The total number of shares repurchased by the Company amounted to approximately 1.7% of its shares outstanding as of June 30, 2024.

Karen Williams, Amex GBT’s Chief Financial Officer, stated: “Our positive and accelerating Free Cash Flow and successful debt refinancing enable us to return cash to shareholders and demonstrate our confidence in our longer-term strategy.”

About American Express Global Business Travel

American Express Global Business Travel (Amex GBT) is a leading B2B travel platform, providing software and services to manage travel, expenses, and meetings & events for companies of all sizes. We have built the most valuable marketplace in B2B travel to deliver unrivalled choice, value and experiences. With travel professionals and business partners in more than 140 countries, our solutions deliver savings, flexibility, and service from a brand you can trust – Amex GBT.

Visit amexglobalbusinesstravel.com for more information about Amex GBT. Follow @amexgbt on X, LinkedIn and Instagram.

Forward-Looking Statements

This communication contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our financial position, business strategy, and the plans and objectives of management for future operations and full-year guidance. These statements constitute projections, forecasts and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this communication are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors: (1) changes to projected financial information or our ability to achieve our anticipated growth rate and execute on industry opportunities; (2) our ability to maintain our existing relationships with customers and suppliers and to compete with existing and new competitors; (3) various conflicts of interest that could arise among us, affiliates and investors; (4) our success in retaining or recruiting, or changes required in, our officers, key employees or directors; (5) factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control; (6) the impact of geopolitical conflicts, including the war in Ukraine and the conflicts in the Middle East, as well as related changes in base interest rates, inflation and significant market volatility on our business, the travel industry, travel trends and the global economy generally; (7) the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; (8) the effect of a prolonged or substantial decrease in global travel on the global travel industry; (9) political, social and macroeconomic conditions (including the widespread adoption of teleconference and virtual meeting technologies which could reduce the number of in-person business meetings and demand for travel and our services); (10) the effect of legal, tax and regulatory changes; (11) the decisions of market data providers, indices and individual investors; (12) the impact of any future acquisitions including the integration of any acquisitions; (13) the risk that the assumptions, estimates and estimated adjustments described in this communication may prove to be inaccurate; and (14) other risks and uncertainties described in the Company’s Form 10-K, filed with the SEC on March 13, 2024, and in the Company’s other SEC filings. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240904757345/en/

Media:

Martin Ferguson

Vice President Global Communications and Public Affairs

martin.ferguson@amexgbt.com

Investors:

Jennifer Thorington

Vice President Investor Relations

investor@amexgbt.com

Source: Global Business Travel Group, Inc.

FAQ

How many shares did American Express Global Business Travel (GBTG) repurchase in Q3 2024?

American Express Global Business Travel (GBTG) repurchased 8,000,000 shares of its Class A common stock in Q3 2024.

What was the price per share for GBTG's stock repurchase?

The repurchase price was approximately $6.85 per share.

What was the total value of GBTG's stock repurchase?

The total value of the stock repurchase was approximately $55 million.

What percentage of outstanding shares did GBTG's repurchase represent?

The repurchase represented approximately 1.7% of GBTG's outstanding shares as of June 30, 2024.

How did GBTG fund the stock repurchase?

GBTG funded the stock repurchase using cash on hand.