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Cendant agrees to sell travel unit

By ASSOCIATED PRESS
Published July 1, 2006

NEW YORK - Travel and real estate services company Cendant Corp. agreed to sell its travel distribution services unit to an affiliate of private-equity firm Blackstone Group for $4.3-billion in cash, Cendant said Friday.

The move is part of a plan announced in October to split Cendant, the owner of Days Inn and Cheaptickets.com, into four companies by selling three of its units. The company plans to spin off Realogy Corp. and Wyndham Worldwide to shareholders in separate transactions in late July.

The sale of the unit, recently renamed Travelport, includes global distribution system Galileo, which serves more than 50,000 travel agencies and more than 60,000 hotels; Gullivers Travel Associates, an online provider of hotel rooms, travel packages and group tours; online travel agencies CheapTickets.com and Orbitz; and other travel-related assets.

"This validates Cendant's assumption that its units are worth more as individual pieces than collectively," said Forrester Research travel analyst Henry Harteveldt. "The price is what was expected on the street, but $4.3-billion isn't exactly pocket change."

Harteveldt expects Blackstone to invest heavily in the businesses, particularly Orbitz.

"I wouldn't be surprised to see Orbitz try to expand into the European and Asian markets," he said.

The deal is expected to close in August, pending regulatory and other customary conditions.

Cendant reiterated that it will use the proceeds to reduce debt at Realogy and Wyndham.

Cendant shares rose 52 cents, or 3.3 percent, to close at $16.29 on the New York Stock Exchange. The stock has traded between $15.16 and $22.50 in the past 12 months.

[Last modified June 30, 2006, 23:39:44]