Cendant, the real estate franchise giant that also has businesses in travel and hotel services, today said it would split the corporation into four independent, publicly traded companies. The new companies will consist of one each for Cendant’s real estate, travel distribution, hospitality and vehicle rental businesses.

Cendant said the breakup is aimed at boosting its stock value.

“Creating four strong and focused pure-play companies is the best way to unlock the full value of Cendant’s businesses for the benefit of our shareholders in both the short and long term,” Cendant Chairman and CEO Henry R. Silverman said in a statement this morning.

“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 recognized the value of the company,” Silverman added.

Following the breakup, Silverman will continue to lead the travel distribution company and serve as non-executive chairman of the newly formed real estate services division.

Following the proposed transaction, Cendant’s shareholders will own 100 percent of the equity in all four companies. The transaction is expected to be effected through three 100 percent spin-offs in the summer of 2006, and is expected to be tax-free for the company and its shareholders.

Cendant anticipates that the separation of the company’s core businesses will provide a clearer understanding and fairer market valuation of each of these businesses. The transaction is intended to reduce the complexity surrounding investor understanding and analysis of Cendant’s businesses and enable investors to choose how to diversify their Cendant holdings.

“From inception,” Silverman said, “each of the new companies will be a major competitor in its sector.”

In real estate, Cendant owns the Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby’s International Realty brands. The company in August reported a 37 percent increase in real estate brokerage offices under the Cendant umbrella. At that time, the five Cendant brands encompassed 14,364 residential and commercial franchised real estate offices in 58 countries and territories around the globe. Collectively, there were more than 300,000 real estate professionals affiliated with the Cendant brands in August.

The Real Estate Services segment is expected to represent 39 to 41 percent Cendant’s estimated 2005 key financial metrics, according to the company’s announcement this morning.

The four new Cendant companies will be led by teams drawn from the corporation’s current senior leadership. Richard A. Smith will be CEO of Real Estate Services, with Silverman serving as non-executive chairman.

At Travel Network, Silverman will serve as chairman and CEO, with Samuel L. Katz as vice chairman and president. Hospitality will be headed by Stephen P. Holmes as chairman and CEO, while Nelson will lead Vehicle Rental Services as its chairman and CEO.

The company emphasized that the planned transaction should not affect the operations of its business units and that generally customers, suppliers, franchisees and other business partners should see no changes in their relationships with Cendant businesses. It also emphasized that employees generally should not be affected.

The Real Estate, Hospitality and Vehicle Rental companies are expected to continue to be based in Parsippany, N.J., where they are now located. Travel Network will headquarter at Cendant’s current New York City office. No change in the location of the company’s workforce is anticipated.

No new names have been selected yet for the new companies, the company said today, but it expects to complete that process prior to the close of the separation. The Cendant name will be retired.

Stock exchange listings for the four new publicly traded companies have not yet been determined, the company said.

Cendant stock (NYSE: CD) traded at $19.40 a share this morning, down 3.4 percent from Friday’s closing price of $20.09.


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