EXHIBIT 99.3
CENDANT ANNOUNCES $1 BILLION SHARE REPURCHASE PROGRAM
Termination of ABI Transaction Facilitates Debt Retirement and Share Repurchase
Cendant to Record $280 Million After-Tax ABI Termination Charge
Parsippany, NJ October 13, 1998 - Cendant Corporation (NYSE: CD) today announced
that its Board of Directors has authorized a $1 billion common share repurchase
program. The Company expects to execute the program through open-market
purchases.
With the termination of its proposed acquisition of ABI, the Company's principal
financial goals will be to retire its outstanding $3.25 billion bank term loan,
a portion of which was raised in contempla tion of the ABI transaction, and to
execute its share repurchase program.
In connection with termination of the ABI transaction, Cendant has paid ABI $400
million and will record a $280 million after-tax charge in the fourth quarter
for this payment and associated transac tion expenses. The Company expects to
use the substantial majority of its available cash to make the ABI payment and
to retire a portion of the bank term loan. The Company expects to retire the re
mainder of the term loan with proceeds from intermediate- and long-term debt
issues and to finance the share repurchase through a combination of internally
generated cash and proceeds from previ ously announced asset sales. The timing
and amounts of these transactions will be governed by mar ket conditions,
Cendant's goal of maintaining appropriate credit ratings, and the terms of
Cendant's bank lending agreements.
"We are pleased to resolve the uncertainty created in the market regarding the
potential impact of the ABI transaction on our capital structure," said Henry R.
Silverman, Chairman, President and CEO of Cendant. "After today, our only
material uncompleted acquisition is our $750 million acquisition of RAC Motor
Services of the UK, which we plan to complete in 1999. Otherwise, all our excess
financial resources for the foreseeable future will be devoted to retiring both
debt and equity, to build shareholder value and maintain appropriate credit
protection." With the termination of the ABI transaction, Cendant has
approximately $1.8 billion in undrawn bank credit facilities, approxi mately $1
billion in cash ( net of the payment to ABI) and significant internally
generated annual free cash flow.
Certain matters discussed in the news release are forward-looking statements, as
defined in the Pri vate Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to a number of known and unknown risks
and uncertainties including, but not limited to, the outcome of the pending
litigation relating to the previously announced accounting irregularities;
uncertainty as to the Company's future profitability; the Company's ability to
develop and implement operational and financial systems to manage rapidly
growing operations; competition in the Company's existing and potential future
lines of business; the Company's ability to integrate and operate successfully
acquired businesses and the risks associated with such businesses; the Company's
ability to obtain financing on acceptable terms to finance the Company's growth
strategy and for the Company to
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operate within the limitations imposed by financing arrangements; uncertainty as
to the future profit ability of acquired businesses; the ability of the Company
and its vendors to complete the necessary actions to achieve a Year 2000
conversion for its computer systems and applications and other fac tors. Other
factors and assumptions not identified above were also involved in the
derivation of these forward-looking statements, and the failure of such other
assumptions to be realized as well as other factors may also cause actual
results to differ materially from those projected. The Company assumes no
obligation to update these forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such
forward-looking statements.
Cendant (NYSE: CD) is the world's premier provider of consumer and business
services. The Com pany operates in three principal segments: Travel Services,
Real Estate Services and Alliance Mar keting. In Travel Services, Cendant is the
leading franchisor of hotels and rental car agencies world wide; the largest
provider of vacation exchange services; a leading fleet management company, the
UK's largest private car park operator, and a leading motorist assistance group
in the UK. In Real Estate Services, Cendant is the world's largest franchisor of
residential real estate brokerage offices, a major provider of mortgage services
to consumers and a global leader in corporate employee relo cation. In Alliance
Marketing, Cendant provides access to insurance, travel, shopping, auto, and
other services, primarily through direct marketing to customers of its affinity
partners. Headquar tered in Parsippany, NJ, the company has more than 40,000
employees and operates in over 100 countries.
Media Contact: Investor Contact:
Elliot Bloom Denise L. Gillen
973-496-8414 973-496-7303
Kekst and Company
Jim Fingeroth
Tom Davies
212-521-4800
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