Sabre, Uniglobe Stocks Performing Well

<FONT SIZE="+3"><B>Sabre, Uniglobe Stocks Performing Well</B>

By Cheryl Rosen

Travel technology stocks appear to be hot in financial circles, with the first two public stock offerings ever launched by the nascent industry-Sabre and Uniglobe-doing better than expected.

In what the IPO Financial Network called "the hottest stock of the week," Sabre Group Holding's initial public offering opened on Oct. 11 at $27, up from the originally projected opening price of $20 to $23. It jumped to $32.75 by the end of the first day on brisk trading of about 8 million shares, before leveling off at about $30. The stock of parent company AMR Corp. rose by about $1 a share.

In all, 20.2 million shares of Sabre's Class A stock were listed on the New York Stock Exchange under the symbol "TSG." The IPO raised about $662 million for Sabre, 90 percent of which will be returned to AMR-whose share of the company is now 84.2 percent rather than 100.

As AMR's technology division, Sabre runs the largest CRS in the United States. It generated $380 million in operating earnings in 1995 on $1.5 billion in revenues. AMR has two other subsidiaries, the Airline Transportation Group, which includes American Airlines, and a management services unit.

The stock offering brought to an end months of speculation by the industry over Sabre's future, stirred up by a Salomon Brothers report that suggested AMR would likely sell at least a piece of the unit this year (<I>BTN</I>, March 4). At the time, PaineWebber senior vice president Samuel Buttrick suggested a 70 percent possibility that AMR would "do an IPO in the 15 percent range."

Sabre officials declined to comment on why they chose an IPO over a total sale, citing SEC regulations that prevent them from discussing the deal during the IPO period, which is still in effect.

The Sabre offering came on the heels of a smaller but equally successful stock launch by travel agency franchiser Uniglobe Travel International in Vancouver, which took about 25 percent of its online booking division public earlier the same week. Stock in Uniglobe Travel Online Inc. was issued at $C2 (U.S.$1.48) a share, began trading at $C4, and soared to $C5.35 (U.S.$3.95) by the closing bell, on a volume of 350,000 shares. It is now listed on the Vancouver Stock Exchange under the symbol "UTO.V.