Cendant may sell travel division amid interest
Former Honolulu site CheapTickets.com and Orbitz are among the businesses up for grabs
Cendant Corp. said it received several offers for its travel business, which includes Orbitz and former Honolulu-based discounter CheapTickets.com, and may sell the unit rather than spinning it off as part of a planned breakup.
Analysts estimate the business may fetch as much as $4 billion. Several buyers have expressed interest in the division, the New York-based travel and real-estate services company said yesterday.
A sale would diverge from a plan by Cendant Chief Executive Henry Silverman to spin the unit off to shareholders as part of the breakup of the company he founded. The decision follows an increase in acquisitions by private-equity firms.
"When companies have reliable cash flows, private equity is going to put a higher valuation on it than the public markets are," said Thomas McIntyre, who helps manage $140 million, including shares of Cendant, at Orleans, Mass.-based McIntyre, Freedman & Flynn. The travel division, named Travelport, may sell for about $4 billion, he said.
Shares of Cendant closed up 64 cents, or 3.8 percent, to $17.49 on the New York Stock Exchange.
CheapTickets.com, formerly known as Cheap Tickets Inc., was founded in Honolulu in 1986 by Michael J. Hartley and his wife Sandra. The Hartleys took the company public in 1999 and sold it to Cendant for a net $280 million in 2001. Cheap Tickets closed its Hawaii call center in 2003.
Cendant had been set to spin off the division to help revive a stock that never recovered from an accounting scandal about nine years ago. It could still spin off the company rather than sell it, Cendant said.
The shares have fallen 10 percent since the four-way split was announced in October. Silverman built Cendant into a $16 billion company by buying assets including the Avis car-rental business, the Days Inn hotel chain and real estate brokerages Century 21 and Coldwell Banker.