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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): MARCH 1, 2001
CENDANT CORPORATION
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-10308 06-0918165
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
9 WEST 57TH STREET NEW YORK, NEW YORK 10019
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 314-1800
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Merger. On March 1, 2001, Cendant Corporation, a
Delaware corporation (the "Company"), acquired all of the issued and
outstanding shares of Class A common stock, par value $.01 per share (the
"Avis Common Stock"), of Avis Group Holdings, Inc., a Delaware corporation
("Avis"), not previously held by the Company or any subsidiary of the
Company (other than shares of Avis Common Stock held by stockholders who
perfect their appraisal rights under Delaware law), pursuant to the
Agreement and Plan of Merger, dated as of November 11, 2000, by and among
the Company, PHH Corporation, a Maryland corporation and an indirect,
wholly owned subsidiary of the Company ("PHH"), Avis Acquisition Corp., a
Delaware corporation and direct, wholly owned subsidiary of PHH (the
"Merger Sub"), and Avis (the "Merger Agreement"). Pursuant to the Merger
Agreement, Merger Sub was merged with and into Avis (the "Merger"), with
Avis continuing as the surviving corporation and an indirect, wholly owned
subsidiary of the Company. As a result of the Merger, the Avis Common Stock
was deregistered under the Securities Act of 1933, as amended, and delisted
from the New York Stock Exchange.
Upon the consummation of the Merger, each outstanding share
of Avis Common Stock (other than shares of Avis Common Stock held by any
subsidiary of Avis, held in Avis' treasury, held by the Company or any
subsidiary of the Company or held by stockholders who perfect their
appraisal rights under Delaware law), was converted into the right to
receive $33.00 in cash, without interest thereon (the "Merger
Consideration"). The aggregate Merger Consideration to be paid to the
former stockholders of Avis in respect of their shares of Avis Common Stock
is equal to approximately $857 million. In addition, pursuant to the Merger
Agreement, holders of options to purchase shares of Avis Common Stock were
entitled, upon consummation of the Merger, at their election, to either (i)
receive a cash payment equal to the difference between the Merger
Consideration and the per share exercise price of their options, less
applicable withholding tax, or (ii) convert their options into options to
purchase shares of common stock, par value $.01 per share, of the Company
(the "Cendant Common Stock") with approximately the same value. As a result
of such election, the former option holders of Avis received from the
Company in exchange for their options, cash payments totaling an aggregate
of approximately $80 million (the "Option Payments") and options to
purchase approximately 800,000 shares of Cendant Common Stock.
Source and Amount of Funds. The Merger Consideration and the
Option Payments were paid with (i) $200 million of cash on hand at PHH,
(ii) a portion of the $528 million of net proceeds received by the Company
in a private placement of 40 million shares of Cendant Common Stock and
(iii) a portion of the borrowings received by the Company under a $650
million credit facility entered into with The Chase Manhattan Bank, as
administrative agent, on February 22, 2001.
Certain Relations between Cendant and Avis. Prior to the
consummation of the Merger, the Company owned 5,535,800 shares of Avis
Common Stock, or approximately 17.8% of the outstanding shares, and three
directors of the Company also served as directors of Avis. In addition, in
June 1999, Avis acquired PHH's vehicle management and fuel card businesses
in exchange for 7.2 million shares of preferred stock (the "Preferred
Stock") of Avis Fleet Leasing and Management Corporation, a Texas
corporation and an indirect, wholly owned a subsidiary of Avis ("AFL"), and
the assumption of $1.8 billion of indebtedness. The Preferred Stock was
convertible into Avis Common Stock and non-voting Class B common stock, par
value $.01 per share, of Avis. Although the Preferred Stock was not
convertible unless certain earnings and market price thresholds were met,
if converted, the Preferred Stock would have resulted in the Company having
beneficial ownership of up to a 20% voting interest in Avis and a 33%
economic interest. In addition, the Company has contractual relationships
with Avis, including the license to Avis of the right to use the Avis
trademark, as well as Avis' telecommunications and computer processing
system. The Company also provided Avis with certain office space, including
at Avis' headquarters. For a complete description of the relationships
between the Company and Avis, reference is made to the section entitled
"Certain Relations between Cendant and Avis" in the Definitive Proxy
Statement of Avis on Schedule 14A, dated January 26, 2001 (the "Proxy
Statement"), which was filed with the Securities and Exchange Commission on
January 26, 2001 and is incorporated by reference herein.
Avis is one of the world's leading service and information
providers for comprehensive automotive transportation and vehicle
management solutions. Avis operates Avis Rent A Car, the second largest
general-use car rental business in the world, with location in the United
States, Canada, Australia, New Zealand and the Latin American Carribean
region; PHH Arval, one of the world's largest fleet management and leasing
companies; and Wright Express, the world's largest fleet card provider. The
Company intends to continue to operate Avis' business.
A copy of the press release issued by the Company announcing
consummation of the Merger is attached hereto as an exhibit to this Current
Report on Form 8-K and is incorporated by reference herein.
ITEM 5. OTHER EVENTS.
In an effort to integrate the operations of Avis into the
Company, the Company effected an internal reorganization on March 1, 2001.
Under this reorganization, Avis became a subsidiary of Cendant Car
Holdings, LLC, a Delaware limited liability company and an indirect, wholly
owned subsidiary of the Company and AFL, which conducts Avis' worldwide
fleet management operations, became a subsidiary of PHH Holdings
Corporation, a Texas corporation and a direct, wholly owned subsidiary of
PHH.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Businesses Acquired.
The Financial Statements of Avis Group Holdings, Inc. are
incorporated by reference from Cendant Corporation's Current
Report on Form 8-K, dated November 11, 2000 (previously filed with
the Commission on November 17, 2000 and incorporated by reference
herein).
(b) Pro Forma Financial Information.
The Pro Forma Financial Information giving effect to the
acquisition of Avis Group Holdings, Inc. are incorporated by
reference from Cendant Corporation's Current Report on Form 8-K,
dated November 11, 2000 (previously filed with the Commission on
November 17, 2000 and incorporated by reference herein).
(c) Exhibits.
No. Description
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2.1 Agreement and Plan of Merger by and among Cendant
Corporation, PHH Corporation, Avis Acquisition Corp. and
Avis Group Holdings, Inc., dated as of November 11, 2000
(incorporated by reference from Cendant Corporation's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000, dated as of November 14, 2000).
99.1 Press Release issued by Cendant Corporation on March 1,
2001, announcing consummation of the Merger.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CENDANT CORPORATION
By: /s/ Eric J. Bock
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Name: Eric J. Bock
Title: Senior Vice President - Law
and Corporate Secretary
Dated: March 9, 2001
EXHIBIT INDEX
Exhibit No. Description
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2.1 Agreement and Plan of Merger by and among Cendant
Corporation, PHH Corporation, Avis Acquisition Corp. and
Avis Group Holdings, Inc., dated as of November 11, 2000
(incorporated by reference from Cendant Corporation's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000, dated as of November 14, 2000).
99.1 Press Release issued by Cendant Corporation on March 1,
2001, announcing consummation of the Merger.
EXHIBIT 99.1
CENDANT COMPLETES ACQUISITION OF AVIS GROUP HOLDINGS, INC.
AVIS HEADQUARTERS IN GARDEN CITY, NY WILL BE RELOCATED TO PARSIPPANY, NJ
NEW YORK, NY, 03-01-2001 -- Cendant Corporation (NYSE: CD) today announced
that it has completed its previously announced acquisition of the portion
of Avis Group Holdings, Inc. that it did not already own for $33 per share
in cash or approximately $937 million. The transaction is expected to be
immediately accretive to Cendant's earnings per share.
Cendant Chairman, President and CEO, Henry R. Silverman stated: "Avis fits
well within Cendant's fee-for-service based business model. Through the
Avis transaction, we expect to take full advantage of revenue-generating
cross marketing opportunities and other synergies within our company."
As a result of the transaction, Cendant expects to realize synergies
between Avis Rent A Car and its Parsippany, NJ-based operations. Within the
next 12 to 18 months, Cendant will phase out of operation the current Avis
headquarters in Garden City, transferring a majority of the positions based
there to Parsippany and other field locations. Cendant's WizCom unit and
other technology support functions will remain in Garden City.
"Although the vast majority of our 20,000 employees work face-to-face with
our customers in thousands of rental locations around the world, Avis Rent
A Car has a proud and valued history in Long Island," said Robert Salerno,
who will remain chief operating officer of Avis Rent A Car. "Yet merging
our headquarters with Cendant offers us cross-marketing and cost-saving
opportunities that are extremely compelling. At the same time, we are
totally committed to ensuring that the gradual transition to Parsippany is
handled with great sensitivity to our dedicated employees and minimal
disruption to our operations."
Additionally, PHH Arval (vehicle management services) and Wright Express
(fuel card services) employees will remain in Hunt Valley, MD and South
Portland, Maine, respectively.
ABOUT AVIS
Avis is one of the world's leading service and information providers for
comprehensive automotive transportation and vehicle management solutions.
Avis operates Avis Rent A Car, the world's second largest general-use car
rental business, with locations in the United States, Canada, Australia,
New Zealand and the Latin American Caribbean region; PHH Arval, one of the
world's leading vehicle management companies; and Wright Express, the
world's largest fleet card provider. For additional information and news
concerning Avis, please log onto the Avis web site at www.avis.com
ABOUT CENDANT CORPORATION
Cendant Corporation is a diversified global provider of business and
consumer services primarily within the real estate and travel sectors. The
Company's core competencies include building franchise systems and
providing outsourcing services. Cendant is among the world's leading
franchisers of real estate brokerage offices, hotels, rental car agencies,
and tax preparation services. Cendant is also a provider of outsourcing
solutions to its business partners including mortgage origination, employee
relocation, customer loyalty programs and vacation exchange services. Other
business units include NCP, the UK's largest private car park operator, and
WizCom, an information technology services provider. With headquarters in
New York City, the Company has approximately 50,000 employees and operates
in over 100 countries.
More information about Cendant, its companies, brands and current SEC
filings may be obtained by calling 877-4INFO-CD (877-446-3623) or by
visiting the Company's Web site at www.cendant.com.
Statements about future results made in this release constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on current
expectations and the current economic environment. The Company cautions
that these statements are not guarantees of future performance. Actual
results may differ materially from those expressed or implied in the
forward-looking statements. Important assumptions and other important
factors that could cause actual results to differ materially from those in
the forward-looking statements are specified in the Company's Form 8-K
filed on February 8, 2001.
Such forward-looking statements include projections. Such projections were
not prepared in accordance with published guidelines of the American
Institute of Certified Public Accountants or the SEC regarding projections
and forecasts, nor have such projections been audited, examined or
otherwise reviewed by independent auditors of Cendant or its affiliates. In
addition, such projections are based upon many estimates and are inherently
subject to significant economic and competitive uncertainties and
contingencies, many of which are beyond the control of management of
Cendant and its affiliates. Certain of such uncertainties and contingencies
are specified in Cendant's Form 8-K filed on February 8, 2001. Accordingly,
actual results may be materially higher or lower than those projected. The
inclusion of such projections herein should not be regarded as a
representation by Cendant or its affiliates that the projections will prove
to be correct.
MEDIA CONTACT: INVESTOR CONTACTS:
Elliot Bloom Denise Gillen
212-413-1832 212-413-1833
Sam Levenson
212-413-1834