2012-01-18 21:03:14 - ChaPaVe urges AOL and TZOO to use TTO to combine companies for mutual benefit of shareholders of both companies

ChaPaVe Partners Urges AOL to Combine with Travelzoo Via a Tactical Tender Offer (TTO) for 7.5 Million Shares; Combo Would Create Powerful Platform for Growth in Travel, Local Deals and Be Poised for On-Line Gaming

NEW YORK, January 18, 2012

ChaPaVe Partners created the Tactical Tender Offer (TTO) to align minority shareholders’ interests with controlling shareholders’ interests, an area often overlooked by activist investors.

ChaPaVe Partners proposes that AOL, Inc. (NYSE:AOL) launch a TTO for up to 7,500,000 shares of the outstanding shares of Travelzoo Inc. (NASDAQ: TZOO) common stock at a price to be determined just prior to filing AOL’s TTO with the SEC and subject to certain conditions as outlined below.

ChaPaVe Partners is intent on unleashing value for both

Travelzoo & AOL shareholders who have seen their shares sink over the last twelve months. Travelzoo is a growth company in an area which has consumer appeal in the difficult economic environment where consumers are looking to save on their travel and leisure expenditures through on-line purchasing. An AOL and TZOO combination can be viewed as a mutually beneficial merger from both a financial and management perspective. AOL has recently come under scrutiny by shareholder Starboard Value LP ( blogs.wsj.com/deals/2011/12/21/read-letter-from-unhappy-aol-inve ..).

With this combination AOL/TZOO can focus on cash generation through sales and spin offs of non-core assets to return capital to shareholders while focusing on monetizing its current core combined assets with revenue enhancement from its combined current subscribers which include smartphone users with their TZOO and AOL apps, 23 million TZOO subscribers, AOL email users, instant messenger users, loyal browser users and last but not least, dial-up users who are ignored by current AOL management. Travelzoo can efficiently boost growth by doubling to tripling its subscriber base immediately with increased sales volumes from this new combined user base. This combination could be immediately accretive to earnings.

ChaPaVe has been in discussions with investors and investment banks who have expressed an interest in financing the combination of these two companies and funding a TTO which would be repaid from sale of non-core or redundant assets of the combined companies post-closing. ChaPaVe is focused on TZOO longer term growth opportunities, including but not limited to this possible combination, with a strategically complimentary company such as AOL.

The conditions for accomplishing this proposed AOL/TZOO combination via TTO would be 1) Travelzoo founder and controlling shareholder, Ralph Bartel, agreeing to a dialog with AOL to explore and complete such transaction, thereby getting minority shareholders' interest better aligned with his controlling interest. Furthermore, another requirement would be 2) TZOO meeting with AOL’s management and its largest shareholders to develop a reasonable approach and commitment to combine AOL and TZOO.

All inquiries, including media inquiries, should be sent to Read Rankin via Email to rrankin@chapave.com. For more information go to www.chapave.com.

Statements contained herein that are not historical facts, including but not limited to statements about ChaPaVe Partners, may be forward-looking statements that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by ChaPaVe Partners, including, but not limited to, the continuing development of the ChaPaVe Partners strategic plans.