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Cendant wins RAC bid?
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May 1, 1998: 8:45 a.m. ET
The marketing firm will reportedly pay $750M for unit of Royal Auto Club
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NEW YORK (CNNfn) - Cendant Corp. agreed Friday to pay $750 million for a unit of Britain's Royal Automobile Club that provides roadside emergency services to members, according to news reports.
Under the deal, Cendant and RAC Motor Services, a unit of its parent club, would reportedly form a trust to act as an advocate for British motorists.
The deal is expected to immediately add to per-share earnings.
Cendant, a business and consumer services firm, was one of about six bidders for the RAC unit, according to earlier reports. But until Friday, RAC officials had refused to discuss the talks in any detail, saying only that they hoped to reach an agreement by the time of the company's annual meeting at the end of May.
Cendant, born last December out of the merger of a hotel franchiser HFS Inc. and direct marketer CUC International, has been under intense investor scrutiny recently.
Its stock lost nearly a third of its value at one point last month after the Parsippany, N.J.-based company discovered potential accounting irregularities at some former CUC business units.
The company's stock (CD) has since staged a modest comeback from a 52-week low of 17. Cendant shares ended down 3/16 at 26-1/16 Thursday.
Cendant owns such hotel brands as Ramada and Howard Johnson and rental-car business Avis.
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Cendant Corp.
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