Cendant Corp. today announced it would consider a sale of its Travel Distribution Services division, believing that the cash proceeds from a sale would help reduce the anticipated public corporate debt of the company.
"As a result of receiving a number of unsolicited indications of interest to acquire TDS, the company has decided to further explore other strategic alternatives for that business," Cendant chairman and CEO Henry Silverman said in a statement.
Silverman said Cendant would consider a sale of TDS—which includes the Galileo global distribution system and the Orbitz online-originating travel agency—in part because such a transaction would not result in the material tax liability, as would a sale of its other divisions. Earlier this month, Silverman told investors Cendant had no plans to sell the four divisions it planned to spin off—TDS, Realogy Corp., Wyndham Worldwide and Avis Budget Group Inc. —though he added that after the spin-offs begin in June, each division will be an independent public company and free to evaluate any potential offers
(BTN, April 3).
Cendant last week announced Jeff Clarke, a former senior executive with CA-formerly Computer Associates-and Hewlett-Packard, will join TDS as CEO and president of the division on May 1
(BTNonline, April 18). "We have moved from the acquisition phase to the execution phase of TDS's development, and Jeff is an ideal choice to lead that effort," Silverman said of the announcement. "His experiences at CA and HP will be extremely helpful in driving revenue and profit growth from our portfolio of brands and businesses."
Gordon Bethune, who in March was named chairman of the TDS division
(BTNonline, March 21), said, "Our decision to join TDS was based upon the opportunity we see in driving growth and value of a highly integrated global travel company. We believe that this can be achieved in either the public or private arena and we are fully supportive of the board's desire to optimize the value for Cendant shareholders."