UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
____________
Form
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
____________
Date
of Report (Date of earliest event reported) July
29, 2005 (July 26, 2005)
Cendant
Corporation
(Exact
name of Registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of
incorporation)
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1-10308
(Commission
File No.)
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06-0918165
(I.R.S.
Employer Identification
Number)
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9
West 57th
Street
New
York, NY
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10019
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(Address
of principal executive
office)
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(Zip
Code)
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Registrant's
telephone number, including area code (212)
413-1800
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None
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(Former
name or former address if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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Agreement
Providing for the Sale of the Marketing Services Division
On
July 26, 2005, we entered into a definitive agreement with two affiliates of
Apollo Management V, L.P. ("Apollo"), Affinity Acquisition Inc. (the
"purchaser") and Affinity Acquisition Holdings Inc. (the "parent"), providing
for the sale of our Marketing Services Division (“MSD”) to the purchaser for
approximately $1.83 billion.
The
agreement provides for the sale of Cendant Marketing Group, LLC and Cendant
International Holdings Limited to the purchaser for a purchase price of
approximately $1.7 billion of cash, net of estimated closing adjustments, plus
$125 million face value of newly issued preferred stock of the parent.
The purchase price is subject to reduction if MSD's EBITDA for the last twelve
months prior to closing is less than a set threshold. The proportional amount
of
preferred stock and cash are subject to adjustment if the ratio of equity in
the
purchaser to preferred stock issued to us falls below a set
threshold.
In
addition, Cendant will receive warrants to purchase up to 7.5 percent of the
common equity of the parent, which will become exercisable upon the earlier
of
four years or the achievement by Apollo of certain investment return
hurdles.
The
purchase agreement contains customary representations, warranties, covenants
and
agreements of Cendant, the purchaser and the parent.
Cendant
will remain a marketing partner and a provider of travel services to MSD through
a number of commercial agreements to be executed at closing. Cendant has
retained liability for certain existing litigation matters, and also has agreed
to provide a limited indemnity to the purchaser with respect to certain existing
obligations of MSD, certain legal proceedings and any breaches of
representations and warranties (which generally survive until April 15, 2007)
and covenants contained in the purchase agreement.
The
transaction is subject to certain closing conditions, including the purchaser's
receipt of financing, receipt of insurance and other regulatory approvals,
the
absence of a material adverse effect on MSD and other customary closing
conditions, and is expected to be completed in the fall. The purchaser has
obtained equity and debt financing commitments for the transactions contemplated
by the purchase agreement, which are subject to customary
conditions.
The
purchase agreement may be terminated in certain limited circumstances, including
upon the failure of the closing of the transaction to occur on or before
December 26, 2005.
A
copy of the press release announcing that we had entered into the purchase
agreement is attached as Exhibit 99.1 and is incorporated by reference herein.
Director
Fees
On
July 26, 2005, Cendant’s Board of Directors approved an increase in the fees
paid to Cendant’s non-employee directors effective with the third quarter Board
compensation payment. As a result, the annual compensation for Cendant’s audit
committee chair, audit committee members and compensation committee chair will
be increased to $30,000, $20,000 and $25,000, respectively.
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Item
8.01
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Other
Information
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On
July
28, 2005, we announced that our Executive Vice President & Treasurer, David
B. Wyshner, has been promoted to vice chairman and chief financial officer
of our Travel Content Division (TCD), reporting to TCD Chairman and Chief
Executive Officer, Stephen P. Holmes. Mr. Wyshner will transition into this
new
role during the summer, and we expect to fill the treasurer post during this
period.
Cendant's
Travel Content Division includes our Avis and Budget vehicle rental operations,
our RCI timeshare exchange company, franchised lodging brands such as Ramada
and
Days Inn, a leading marketer of vacation rental properties in Europe, and
the
largest timeshare sales and development business in the United States. Mr.
Wyshner will be responsible for coordinating all of the division's financial
activities, with oversight of the division's controllers; its mergers and
acquisitions strategy and execution; and customer contact centers. In addition,
he will play an integral role in helping to manage the day-to-day operations
of
the division.
A
copy of
the press release announcing Mr. Wyshner's new post is attached as Exhibit
99.2
and is incorporated by reference herein.
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Item
9.01
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Financial
Statements and Exhibits.
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(c)
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Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
Release dated July 26, 2005.
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99.2
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Press Release dated July 28, 2005. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CENDANT CORPORATION
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By:
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/s/
Eric J. Bock
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Eric
J. Bock
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Executive
Vice President, Law and Corporate
Secretary
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Date:
July 29, 2005
EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
Release dated July 26, 2005.
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99.2
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Press Release dated July 28, 2005. | |
Cendant
Corporation Announces Definitive Agreement
to
Sell its Marketing Services Division to Affinity Acquisition Holdings LLC for
Approximately $1.83 Billion
Transaction
Expected to Close in the Fall
NEW
YORK, July 26, 2005 - Cendant
Corporation (NYSE: CD) today announced that it has entered into a definitive
agreement to sell its Marketing Services Division (“MSD”) to Affinity
Acquisition Holdings LLC, an affiliate of Apollo Management, L.P., for
approximately $1.83 billion. MSD is a leading direct marketer of membership
clubs and insurance products, and generated $1.5 billion in revenues in 2004.
The transaction is subject to certain closing conditions, including receipt
of
financing, regulatory approvals and customary closing conditions, and is
expected to be completed in the fall.
The
purchase price includes approximately $1.7 billion of cash, net of estimated
closing adjustments, plus $125 million in the form of newly issued preferred
stock of the purchaser. In addition, Cendant will receive warrants to purchase
7.5 percent of the common equity of the purchaser, which will become exercisable
upon the earlier of four years or the achievement by Apollo of certain
investment return hurdles. Cendant will remain a marketing partner and a
provider of travel services to MSD.
Cendant’s
Chairman and Chief Executive Officer, Henry R. Silverman, stated: “We are very
pleased to announce this transaction with Apollo. It represents a major step
toward the completion of our strategic re-positioning announced last year to
simplify the Company and focus on our core real estate and travel services
businesses. As we announced in our second quarter earnings release issued
yesterday, following the completion of this transaction we intend to increase
our common stock repurchase target from $1 billion during 2005 to $2 billion
over the next 18-months.”
The
Marketing Services Division is comprised primarily of Cendant’s Trilegiant,
Progeny and Cims subsidiaries and is headquartered in Norwalk, Conn. The
businesses being sold have approximately 3,600 employees in the United States
and Europe. In its consolidated financial statements, Cendant has previously
classified the results of MSD as those of discontinued operations.
Banc
of America Securities LLC and Credit Suisse First Boston LLC acted as financial
advisors to Cendant in connection with the transaction. Harris Nesbitt Corp.
provided a fairness opinion to Cendant in connection with the transaction.
Deutsche Bank served as financial advisor to Apollo in connection with the
transaction.
About
Cendant Corporation
Cendant
Corporation is primarily a provider of travel and residential real estate
services. With approximately 85,000 employees, New York City-based Cendant
provides these services to business and consumers in over 100 countries. More
information about Cendant, its companies, brands and current SEC filings may
be
obtained by visiting the Company's Web site at
http://www.cendant.com.
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Cendant
Media Contacts:
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Cendant
Investor Contacts:
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Elliot
Bloom
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Sam
Levenson
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212-413-1832
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212-413-1834
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Kelli
Segal
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Henry
A. Diamond
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212-413-1871
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212-413-1920
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Apollo
Management, LP Media/Investor Contact:
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Steven
Anreder
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212-532-3232
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Exhibit
99.2
Cendant
Corporation Announces the Promotion of David Wyshner to Vice Chairman and Chief
Financial Officer of the Company’s Travel Content Division
NEW
YORK, July 28, 2005—Cendant
Corporation (NYSE:
CD)
today
announced that its Executive Vice President & Treasurer, David B. Wyshner,
has been promoted to vice chairman and chief financial officer of the Company’s
Travel Content Division (TCD), reporting to TCD Chairman and Chief Executive
Officer, Stephen P. Holmes. Mr. Wyshner will transition into this new role
during the summer, and the Company expects to fill the treasurer post during
this period.
Cendant’s
Travel Content Division includes the Company’s Avis and Budget vehicle rental
operations, its RCI timeshare exchange company, franchised lodging brands such
as Ramada and Days Inn, a leading marketer of vacation rental properties in
Europe, and the largest timeshare sales and development business in the United
States.
Mr.
Wyshner will be responsible for coordinating all of the division’s financial
activities, with oversight of the division’s controllers; its mergers and
acquisitions strategy and execution; and customer contact centers. In addition,
he will play an integral role in helping to manage the day-to-day operations
of
the division.
“With
Cendant’s transition to a ‘pure play’ travel and real estate company complete,
the focus on operations becomes ever more important,” said Ron Nelson, Cendant’s
president and chief financial officer. “To continue building for the future, we
need to develop our best talent and ensure that they are exposed to all parts
of
the company. David has handily succeeded in every corporate finance role he
has
undertaken. This new position brings together his considerable financial
expertise with his intimate knowledge of the business to fill an important
operating role that I am certain will be marked by considerable accomplishment
and success in the future. Furthermore, his promotion illustrates our very
strong commitment and conscious effort to leverage our internal talent. By
moving outstanding individuals such as David into operations positions of
increasing responsibility, we further broaden and diversify their skills and
ultimately benefit the Company and its shareholders.”
Mr.
Wyshner joined Cendant in 1999 from Merrill Lynch & Co., where he was a vice
president in the investment banking division, specializing in corporate finance
and mergers and acquisitions.
About
Cendant Corporation
Cendant
Corporation is primarily a provider of travel and residential real estate
services. With approximately 85,000 employees, New York City-based Cendant
provides these services to business and consumers in over 100 countries. More
information about Cendant, its companies, brands and current SEC filings may
be
obtained by visiting the Company's Web site at http://www.cendant.com.
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Media
Contacts:
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Investor
Contacts:
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Elliot
Bloom
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Sam
Levenson
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212-413-1832
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212-413-1834
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Kelli
Segal
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Henry
A. Diamond
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212-413-1871
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212-413-1920
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