Roger Hardy, who in February sold web-only eyewear company Coastal Contacts for $385.7 million, will consolidate OnlineShoes.com and ShoeMe.ca.
Delta agrees to reduce its outstanding preferred stock, which will reduce Priceline`s dividend expenses.
Priceline.com and Delta Air Lines Inc. said today that Delta has agreed to restructure its investment in priceline.com. Under the terms of the agreement, priceline.com will reduce its outstanding preferred stock by $280 million and significantly reduce its dividend expense, while Delta will be entitled to increase its stake in priceline.com.
Delta had previously held 6 million shares of convertible preferred stock of priceline.com with a total liquidation preference of $359.6 million and convertible into 6 million shares of priceline.com common stock. Under today`s agreement, Delta will exchange those shares for 80,000 shares of a new priceline.com preferred stock, with a total liquidation preference of $80 million, and also will receive warrants to purchase approximately 27 million shares of priceline.com common stock at the February 6, 2001 closing market price of $2.97 per share.
"Priceline.com is a valuable distribution partner to us," said M. Michele Burns, Delta`s EVP and CFO. "We are very supportive of their business model and believe this transaction is in the best interest of both Delta and priceline.com."
"Delta Air Lines has made a major commitment to the future of priceline.com by restructuring its equity," said priceline.com CFO Robert Mylod. "We are pleased by this new agreement and look forward to continuing our long-term partnership with the Delta team."
The new series of preferred stock to be issued to Delta has an aggregate liquidation preference of $80 million and will pay dividends of 2.8 million shares of priceline.com common stock per year. The preferred stock is mandatorily redeemable on February 6, 2007. The preferred stock can be redeemed, at either priceline.com`s or Delta`s option, upon a change of control of priceline.com. The warrants to purchase shares of priceline.com common stock to be issued to Delta are fully vested and can be exercised at Delta`s election at any time prior to the redemption of the preferred stock. To pay the exercise price of the warrants, Delta will surrender shares of preferred stock valued at the liquidation preference per share.