Cendant Corp. is moving forward with a spin-off its Realogy Corp. and Wyndham Worldwide Corp. subsidiaries, and will relieve the companies of much of their indebtedness through the sale of its Travelport unit.
Cendant Corp.’s board Thursday approved the spin-offs of its real estate and hospitality units, a plan put forward in February.
The spin-off will be accomplished by distributing all of the common stock of Realogy Corp. and Wyndham Worldwide Corp. to Cendant shareholders. Cendant shareholders will receive one share of Realogy for every four shares of Cendant stock they own at the close of business on July 21, and one share of Wyndham Worldwide for every five shares of Cendant common stock held on the same date.
Realogy Corp. — the world’s largest residential real estate brokerage franchisor and a provider of title and settlement services — includes under its umbrella Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, and Sotheby’s International Realty.
Realogy has $2.225 billion in outstanding debts, which Cendant plans to slash to about $750 million through the sale of its Travelport subsidiary to The Blackstone Group under an agreement announced June 30.
Proceeds from the $4.3 billion sale of Travelport — the parent company of Cheaptickets.com and Galileo International booking system — will also be used to reduce the indebtedness of Wyndham Worldwide from $1.36 billion to $600 million, Cendant said in a press release. Wyndham is the parent company of hotel chains including Super 8, Days Inn and AmeriHost Inn.
The companies remaining under the Cendant umbrella are rental car firms Avis Group Holdings and Budget Rent a Car. When the spin-offs of its other subsidiaries are completed, Cendant intends to rename itself Avis Budget Group.
Cendant has 1 billion shares outstanding. After distributing 250 million shares of Realogy common stock and 200 million shares of Wyndham Worldwide, Cendant plans a 1-for-10 reverse stock split to reduce the number of Cendant (or Avis Budget Group) shares to 100 million. Realogy and Wyndham Worldwide have filed applications to list their common stock on the New York Stock Exchange under the symbols “H” and “WYN.”
As a part of the spin-off plan Cendant Mobility, a major global relocation services company, re-branded as Cartus in May. Cendant Settlement Services Group has been renamed Title Resource Group.