Shares of Travelport Worldwide soared 17 percent on Monday after a report said activist hedge fund Elliott Associates is in talks to make a bid for the company.
Reuters reported that Elliott, the New York-based hedge fund founded by Paul Singer, has held talks with banks about financing a potential bid for Travelport. The report, citing sources, comes after Elliott said in a regulatory filing it owns 11.8 percent of Travelport's outstanding shares.
The hedge fund also said in the filing it would talk to Travelport about exploring a potential sale.
The news sent Travelport's stock surging to its biggest one-day gain ever. Matthew Broome, an analyst at Cowen, said Elliott's involvement could bring further gains to the stock.
"Activist interest in TVPT is understandable, given its positioning, cash flows, and depressed valuation. We expect activist involvement to create value beyond today's ... move," Broome said in a note.
"With this said, however, having been under private equity ownership as recently as 2014, we believe that there are many at TVPT that are culturally opposed to repeating that scenario, and this may prove a difficult hurdle to overcome," he added.
Travelport, a company focused on providing distribution, technology and payment methods to the travel industry, had seen its stock rise 9.8 percent for 2018 prior to Monday. It is now up more than 28 percent this year.