Icahn taking travel company public

Thursday, March 25, 1999 | 11:37 a.m.

A Las Vegas travel company owned by Carl Icahn plans an initial public offering that could raise $138 million.

Lowestfare.com Inc. is a discount travel service that provides low fares over the telephone and Internet through its agreements with 800 travel agents and a variety of airlines and resort companies, including the Icahn-owned Stratosphere hotel-casino, and Trans World Airlines, an airline once controlled by Icahn. The company also has agreements with America West Airlines, Northwest Airlines, Virgin Atlantic Airways, Hertz Rent-a-Car, and Carnival Cruise Lines.

According to a registration statement filed with the Securities and Exchange Commission, Lowestfare.com will use offering proceeds to expand its sales and marketing capabilities, for brand name promotion, for investments in technology and for other corporate purposes.

The registration is a preliminary form. While it estimates an offering of $138 million, it does not state when the offering will occur. The company is asking for SEC authorization to issue 75 million shares. Initial public offering registrations typically undergo rigorous SEC review, and the offering details can change significantly before the actual offering.

According to the statement, Lowestfare.com earned $13.7 million last year on revenues of $224.4 million. If it had been taxed as a public corporation, Lowestfare.com would have earned $9.1 million, or 32 cents for each of its 28.7 million shares.

Revenues have increased dramatically from 1995, when the company lost $1.1 million on revenues of $13.8 million. In 1997, the company turned its first profit, earning $8 million on revenues of $200.7 million.

The registration statement shows Icahn owns 99.8 percent of Lowestfare.com, or 28.6 million shares. If the company sold 75 million shares in its offering, Icahn's stake would be reduced to about 38 percent.