Cendant Corp. remains on track to spin off its four businesses into independent publicly traded entities during the second and third quarters of this year, the company’s chairman and chief executive, Henry Silverman, said Tuesday, according to reports.

During the company’s investor day conference, Silverman said he doesn’t anticipate any delays or roadblocks, barring some unforeseen external event, CBS MarketWatch reported.

“Obviously if the market shuts down for, say, bird flu or the SEC review process is elongated, hypothetically we could be delayed, but we don’t expect either of these,” Silverman said, according to reports.

Silverman said the company has analyzed thousands of contracts, relationships, systems and people to make sure the new companies will be fully functional on the day they’re spun off, reports said.

The company’s real estate company, Realogy, and its hotel company, Wyndham Worldwide, which represent about two-thirds of Cendant’s earnings before interest, taxes, depreciation and amortization, or EBITDA, will be spun off in the second quarter. The company had announced this move in February.

Cendant’s car rental company, Avis Budget Group, and travel distribution service company will be spun off in the third quarter, and shares are expected to be distributed to shareholders in early and mid-Summer for the first three businesses, and early October for the travel distribution service company, reports said. The transactions have been structured as tax-free spinoffs.

Silverman said the company’s bank and public debt would be repaid and refinanced at the time of the second spinoff, according to reports.

Silverman reiterated his belief that the spinoffs are in the best interest of shareholders, reports said. He said Cendant considered selling itself but found that “it was too big for financial buyers and too diverse for strategic buyers,” according to reports.

Since many of the company’s business have outperformed the broader market, Silverman believes they will be valued higher as independent companies, and said that he sees the sum of the individual parts being greater than the whole, reports said.

However, Silverman doesn’t rule out the individual companies being sold after they’re spun off, reports said.

“After the spinoff, each of the four companies will be an independent company and will be free to evaluate any potential transaction that is presented to it on the merits of that transaction.” he said, according to MarketWatch.


Send tips or a Letter to the Editor to janis@inman.com or call (510) 658-9252, ext. 140.

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