Cendant to buy time-share developer
Associated Press
Hotel franchise operator Cendant Corp. said yesterday that it plans to buy Trendwest Resorts Inc., a time-share resort developer, for about $894 million in stock.
Bloomberg News Service
Cendant is the world's largest lodging franchiser, with brands including Super 8, Days Inn, Ramada and Howard Johnson.
Cendant will add to its travel portfolio Trendwest, which owns 48 time-share properties, including this resort in Cabo San Lucas, Mexico, and on three Hawaiian islands.
Trendwest, through exclusive relationships with WorldMark, the Club and WorldMark South Pacific Club, has 48 properties located primarily in the western United States, British Columbia, Mexico, Hawai'i and the South Pacific.
Its resorts in Hawai'i are on the Big Island, Kaua'i and Maui. Overall, it has about 150,000 time-share owners, who typically buy ownership rights to a property for a specified period each year. Cendant's existing time-share operations, Fairfield Resorts and Equivest, are mainly in the eastern United States.
New York-based Cendant, which last year bought Hawai'i-based Cheap Tickets, agreed to swap shares of its stock for all the outstanding common stock of Redmond, Wash.-based Trendwest.
Cendant also has agreed to buy about 90 percent of the outstanding shares of Trendwest from JELD-WEN and certain stockholders. JELD-WEN owns approximately 81 percent of Trendwest.
Cendant will issue 48.3 million to 55.4 million shares, depending on its share price, expected to be between $16.15 and $18.50. Cendant also will assume approximately $74 million of Trendwest debt.
Cendant has made more than $6 billion of acquisitions in the travel business since the beginning of 2000, including travel reservation company Galileo International Inc., Cheap Tickets and the part of Avis group Holdings it did not already own.
At an investor conference in December, Cendant Chairman Henry Silverman said the company was targeting the time-share business for expansion because of the aging population.
The company also said it expects to "cross-market" the business with its other units, which range from hotels such as Days Inn and Ramada to Avis rental cars and even its real estate brokerage operations, which include Coldwell Banker and Century 21.
"Time share is the fastest-growing segment of the travel business," said Silverman. "We are now setting our sites on time-share opportunities overseas."
