Special Situation Investing

Wednesday, August 23, 2006

Cendant (CD) Completes Travelport Sale

Cendant has completed the sale of Travelport for $4.3 Billion today. They announced this previously so I consider the sale itself a non-event. Cendant is planning to distribute $1.4 Billion of the proceeds to recently spun-off Realogy, $760 million to Wyndham and use the remainder to pay expenses and debt.

More interesting, Realogy announced that they will be using the majority of the funds to repurchase 19% of shares outstanding (48 million shares or $970 million worth at todays closing price of $20.23). The remaining funds will be used to repay debt. Realogy also lowered earnings expectations to $250-340 million in fiscal 2006 ($1.03 - $1.43 per share). The company still doesn't seem like a buy to me given the state of US real estate but the share buybacks are encouraging.

Other links on Cendant and the Wydham/Realogy spinoffs are available here, here and here.


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