SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------
September 16, 1999 (September 14, 1999)
(Date of Report (date of earliest event reported))
Cendant Corporation
(Exact name of Registrant as specified in its charter)
Delaware 1-10308 06-0918165
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or Identification Number)
organization)
9 West 57th Street
New York, NY 10019
(Address of principal (Zip Code)
executive office)
(212) 413-1800
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if applicable)
Item 5. Other Events
Except as expressly indicated or unless the context otherwise requires,
"Cendant", "we", "our", or "us" means Cendant Corporation, a Delaware
Corporation, and its subsidiaries
Sale of Entertainment Publications Unit. On September 14, 199, we
announced the execution of an agreement to sell our Entertainment Publications,
Inc. unit, the world's largest marketer and publisher of coupon books and
discount programs to The Carlyle Group for $345 million in a leveraged
recapitalization transaction. We will retain approximately 16% of Entertainment
Publications' equity and expect to receive $325 million in cash at closing.
The sale of Entertainment Publications is expected to generate an
after-tax book gain of approximately $140 million. The transaction is subject to
customary regulatory approvals and customary conditions and is expected to close
in the fourth quarter.
Creation of Netmarket Group, Inc. On September 15, 1999, we announced the
creation of Netmarket Group, Inc. (NGI) as an independent company that will
pursue the development of interactive businesses currently within the Company's
Direct Marketing Division. NGI will own, operate, develop and expand what were
formerly Cendant's principal on-line membership businesses, including
Netmarket.com, Travelers Advantage, AutoVantage and Privacy Guard. Additionally,
NGI will own and operate Hagglezone.com, the first site of its kind where
consumers "haggle" with computer-generated on-line characters to get low prices
on name-brand products. NGI's businesses currently have 1.3 million on-line
members and are expected to produce approximately $70 million of revenue in
1999.
We will retain the opportunity to participate in NGI's value through
ownership of a convertible preferred stock, ultimately exchangeable into 78% of
NGI's fully diluted common shares. NGI's management will hold the next largest
stake through NGI stock options. We will donate NGI's outstanding common stock
to a charitable trust. In addition, NGI will issue common stock to certain of
its marketing partners. Accordingly, as a result of the change in ownership of
NGI's common stock from us to independent parties, NGI's results will no longer
be included in our financial statements.
In conjunction with the creation of NGI, we estimate that we will
record a pre-tax charge of $85 million and an after-tax charge of $48 million or
$0.06 cents per share in the third quarter of 1999.
For a more detailed description of the terms of the transactions,
reference is made to Exhibit 99.1 and 99.2, which are incorporated herein by
reference in their entirety.
Item 7. Exhibits
Exhibit
No. Description
- -------- -----------------------------------------------------------------
99.1 Press Release: Cendant Corporation Agrees to Sell Its
Entertainment Publication Unit to The Carlyle Group, dated
September 14, 1999.
99.2 Press Release: Cendant Corporation Creates Netmarket Group, Inc.,
dated September 15, 1999.
SIGNATURE
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/ James E. Buckman
James E. Buckman
Vice Chairman
and General Counsel
Date: September 16, 1999
CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
Report Dated September 16, 1999 (September 14, 1999)
EXHIBIT INDEX
Exhibit
No. Description
- -------- -----------------------------------------------------------------
99.1 Press Release: Cendant Corporation Agrees to Sell Its
Entertainment Publication Unit to The Carlyle Group, dated
September 14, 1999.
99.2 Press Release: Cendant Corporation Creates Netmarket Group, Inc.,
dated September 15, 1999.