Board Approves Cendant Split

The board of directors of Cendant Corp. has approved plans to split the travel and real estate conglomerate into four separate companies, each with a more clearly defined focus, the corporation announced Monday on its Web site.

One of the new companies will take over Cendant's hospitality businesses, including the Ramada and Howard Johnson brands. Each of the other three will also focus on one area: real estate, travel booking or car rentals.

The move is consistent with recent efforts by the corporation's management to narrow the scope of Cendant's holdings. The company's leadership is hoping the change will spur a boost in its stock value.

"We and our advisers believe the sum of the parts has a value in excess of our current share price," company Chairman and Chief Executive Officer Henry R. Silverman said in the Web release.

The conglomerate has been working for more than a year to shed holdings that did not fit easily into real estate and travel-related categories, divesting itself of its tax preparation, mortgage and fleet management businesses, among others.

With the breakup, slated for the summer of 2006, Cendant joins several large corporations that have recently trimmed their holdings in bids to capture investor attention.

Viacom Inc., the media conglomerate that owns CBS and MTV, announced plans earlier this year to split its holdings into two companies, one focusing on broadcast television and the other on cable networks.

Internet conglomerate IAC/InterActiveCorp has also been simplifying its profile, spinning off travel sites including Expedia.com, a rival of Cendant's Orbitz.

Of the four as-yet unnamed companies to be created from Cendant's holdings, the one focusing on real estate services will take with it the largest share of the conglomerate's revenue — about 40 percent.

That company, which will include the Century 21 and Coldwell Banker brands, will be headed by CEO Richard A. Smith, who already leads Cendant's real estate services division. Stephen P. Holmes, the chairman and CEO of Cendant's hospitality services division, will head the breakaway hospitality company.

Silverman will become chairman and CEO of the new travel company, which will include Orbitz and other businesses.

Cendant was expected to report its third quarter results later Monday.