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Cendant confirms four way split

Cendant has confirmed that it is splitting its business into four separate divisions.
The new divisions will cover travel distribution, hospitality, vehicle rental and real estate. The name Cendant will be replaced by new titles for the four individual companies.

Cendant executives planned the move after deciding that the price of the group’s shares was held back by its conglomerate status.

Cendant, with a market value of about $21 billion, was built up through acquisitions under Henry Silverman, Cendant’s chief executive, who merged his HFS group with CUC International in 1997.

Cendant acquired Orbitz for $1.4 billion last year. This acquisition positioned Cendant as the second largest online travel company in the US. Cendant acquired ebookers for $400 to strengthen its position in Europe. It had previously purchased Gullivers and Octopus.

“All of our businesses have done well, yet despite Cendant’s consistently strong operating and financial performance in recent years the market has not fully recognised the value of the company,” Chief Executive Henry Silverman said in a statement.


Cendant hopes that the split will enable shareholders to realise Cendant’s value. The transaction is intended to reduce the complexity surrounding investor understanding and analysis of Cendant holdings. 

Cendant also expects to attract new interest from investors who want to own stock in one or more of the separate companies.

Following the proposed transaction, Cendant’s shareholders will own 100%
of the equity in all four companies. 

The transaction is expected to be effected through three 100% spin-offs in the summer of 2006.  It is expected to be tax-free for the Company and its shareholders.

The Company emphasized that the planned transaction should not affect the operations of its business units. It also emphasized that employees generally should not be affected.   

Mr. Nelson said, “The creation of four separate, pure-play companies will offer Cendant employees important new opportunities for growth. One of our highest priorities will be to ensure that as many employees as possible are placed in appropriate positions at the new companies.”

Cendant will report its third quarter results today after the market closes.  Earnings per share were $0.44, which is consistent with the low end of the range of the Company’s previous guidance.