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Cendant to Sell Travelport Unit for $4.3 Billion

July 01, 2006|From Times Wire Services

CHICAGO — Cendant Corp. has agreed to sell its travel services division to an affiliate of private equity firm Blackstone Group for about $4.3 billion in cash, scrapping plans to spin off the unit.

The New York-based company said Friday that it expected to complete the sale of Travelport, which owns the Orbitz online travel agency and Cheaptickets.com, in August.

Shares of Cendant rose 52 cents, or 3.3%, to $16.29.

The move is part of a plan announced in October to split Cendant into four companies. The company plans to spin off its real estate unit, Realogy Corp., and a hotel division, Wyndham Worldwide, in separate transactions this month.

The Travelport sale also includes global distribution system Galileo, which serves more than 50,000 travel agencies and more than 60,000 hotels and other travel-related assets.

"This validates Cendant's assumption that its units are worth more as individual pieces than collectively," Forrester Research travel analyst Henry Harteveldt said.

Proceeds from the sale would primarily be used to reduce debt at Realogy and Wyndham.

Travelport competes with Expedia Inc. and Priceline. The sector has lost some luster this year as top travel sites have tried to distinguish themselves from new competitors.

Weakness at Travelport weighed on profit, Cendant said in February. It reported a 79% drop in 2005 earnings before interest, taxes, depreciation and amortization, even as revenue rose 35%.

The unit had sales of $2.43 billion last year.

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