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Cendant selling travel services in deal worth $4 billion
Cendant is selling or spinning off its travel services division, including the Orbitz and CheapTickets Web sites — a move that will benefit other online travel sites.
Henry Harteveldt, a Forrester Research analyst, said the sale would be “particularly helpful” to other online sites.
“As a freestanding unit, it can be better viewed as an impartial — and therefore more attractive — partner to travel agencies and suppliers alike,” he said.
The price tag could be $4 billion or more, analysts said.
Cendant’s move is apparently part of a plan to help pay down debt and boost the company’s stock. It reverses more than a decade of acquisitions.
The company has received a “number of unsolicited indications of interest,” said CEO Henry Silverman.
Cendant’s travel unit was supposed to be the company’s fastest growing business. “But through a series of management missteps and pressure from suppliers and competitors, the unit has struggled,” wrote The New York Times.
The travel unit has more than 22 brands and employs 8,000people. It was built through recent acquisitions.
In addition to the two Web-based travel businesses, the travel services unit, now known as Travelport, also includes the Galileo electronic reservation network used by travel agents and a travel agency, Gullivers Travel Associates.
“The travel services division has been weighing on Cendant and caused a larger-than-expected charge against the company’s fiscal fourth quarter earnings,” reported Reuters.
Cendant has hired Citigroup, J. P.Morgan Chase and Evercore Parnters to handle an auction for the travel unit.
Cendant said it still plans to split off its hospitality and car-rental operations into three publicly traded companies.
Report by David Wilkening
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