NEW YORK (AFX) - Cendant Corp. said Wednesday it has closed on the $4.3 billion sale of its travel services division to the Blackstone private equity group, finalizing a plan to split the company into four separate businesses.
The company's announcement on Travelport came the same day it received approval from the European Commission, which gave approval under a fast-track procedure that automatically clea2rs a deal within 30 days if it identifies no antitrust concerns and receives no complaints from rivals.
The sale of Travelport was part of an overall break-up plan initiated in October of last year that was designed to increase shareholder value by creating four 'pure-play' companies. Cendant's real estate services and hotel divisions were spun off on July 31 through a distribution of shares to Cendant shareholders. Without Travelport, Cendant now consists of its Avis and Budget rental car business.
On Aug. 29, the Cendant board will consider changing the company name to Avis Budget Group, taking the ticker symbol CAR on the NYSE and doing a reverse stock split.
Analysts have also speculated that Realogy and Wyndham may also be taken up by private equity investors.
In part, the Travelport sale was meant to pay down outstanding debt at those two units that were spun off. Cendant said Realogy Corp., which owns brands such as Century 21 and Sotheby's International, will receive $1.4 billion and Wyndham Worldwide Corp. would get $760 million. Wyndham runs hotels under the Super 8, Days Inn and Howard Johnson brand names.
Travelport includes the Galileo reservations system, which serves more than 50,000 travel agencies and over 60,000 hotels; CheapTickets.com and Orbitz.
Also on Wednesday, Realogy announced it would use about $1 billion of $1.4 billion in proceeds from the Travelport sale to buy back shares. It plans to buy 48 million shares, which represents about 19 percent of its 250 million total shares outstanding. The rest would be used to reduce debt.
Shares of New York-based Cendant were unchanged Wednesday at $1.97 on the New York Stock Exchange.
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