Cendant Corp., which has defined itself with mammoth mergers and acquisitions, is curbing its appetite for super-size additions, executives said during a first-quarter earnings conference call today. Instead, Cendant officials said, they are looking to nurture the fruits of previous acquisitions with organic growth.

“We do not need to acquire anything of massive scale,” said Henry R. Silverman, Cendant CEO and president. But officials didn’t rule out the possibility of smaller, tuck-in acquisitions, especially in the real estate brokerage and travel segments.

Cendant, parent company of NRT, the nation’s largest residential real estate brokerage company, is putting a lot of work into expansion plans for Sotheby’s International Realty, a residential brokerage brand it picked up this year for a about $100 million. Cendant purchased U.S. residential brokerage operations of Sotheby’s and 50 years’ worth of licensing rights to the brand. Cendant’s major real estate brands also include Century 21, Coldwell Banker and ERA.

Sotheby’s has 24 offices and more than 175 exclusive affiliated brokerages worldwide, with operations spanning 40 states and 20 countries. The brand has been a leader in the luxury residential brokerage market. Silverman said it is ripe for expansion.

“There are 3,100 ZIP code areas where it would be appropriate to operate Sotheby’s offices, based on the selling price in those ZIP codes. The opportunity is absolutely immense,” Silverman said.

Michael R. Good, appointed by Cendant as president and CEO of Sotheby’s International Realty Corp., oversees Sotheby’s current affiliate network and the development and rollout of the Sotheby’s franchise system.

Cendant’s mortgage and settlement services segment had a dismal quarter, with revenues dropping from $370 million in the first quarter of 2003 to $238 million in the first quarter of 2004. The decline was “primarily due to substantially lower mortgage refinancing volumes and margins on securitized loan sales” since last year and “year-over-year comparisons will improve significantly as the year progresses,” the company said in its earnings statement yesterday.

Silverman dispelled rumors that Cendant planned to sell any or all of its mortgage business to Countrywide.

“We are not selling our mortgage company or any part thereof to Countrywide,” he said. “I don’t know where that rumor came from, but I’d like it to go away.”

Silverman, 63, also commented on a Monday announcement by Cendant that the company plans to amend his compensation package to settle a shareholder lawsuit. The lawsuit alleged that Cendant’s board of directors violated fiduciary responsibilities in approving Silverman’s compensation package. He said a “protracted and expensive lawsuit” on the matter would not be in the best interest of shareholders. It was better, he said, “to resolve it promptly rather than wasting time and money doing it.”‘

Cendant’s board of directors today announced a regularly quarterly cash dividend of 7 cents per common share, payable June 15 to stockholders of record on May 24, 2004.

Send tips or feedback to glenn@inman.com; (510) 658-9252, ext. 137.


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