Exhibit 99
[CENDANT LOGO]
CENDANT AGREES TO ACQUIRE BUDGET GROUP
STRATEGIC INVESTMENT BY PARENT COMPANY OF AVIS RENT A CAR
BUDGET TO REMAIN AN INDEPENDENT BRAND
REGULATORY CLEARANCE OBTAINED FROM FTC
OFFICIAL CREDITORS COMMITTEE AGREES TO SUPPORT ACQUISITION
NEW YORK, NY AND LISLE, IL, AUGUST 22, 2002 - Cendant Corporation (NYSE:CD)
today announced that it has entered into a definitive agreement to acquire
substantially all of the assets of Budget Group, Inc. (OTCB: BDGPA) for $107.5
million in cash plus the payment of certain transaction related expenses and
assumption of certain contracts and trade payables. In addition, a subsidiary of
Cendant will assume approximately $2.7 billion in non-recourse asset-backed
vehicle-related debt. Budget Group is the third-largest general use car and
truck rental company in the United States.
Pursuant to the definitive agreement, Cendant will acquire Budget's operations
in the United States, Canada, Australia, New Zealand and Latin America. Budget
is seeking a buyer for its operations in Europe, the Middle East and Africa and
anticipates that these operations will continue to operate as usual under the
Budget brand name. The companies expect to complete the transaction during the
fourth quarter of 2002.
Following the acquisition, Budget will continue to operate as a separate and
independent brand. Budget will complement the travel services currently offered
by Cendant, including Avis car rental, Galileo travel distribution services,
Trendwest and Fairfield Resorts timeshare development, RCI timeshare exchange,
Cendant Travel Services, Cendant's nine lodging brands, Lodging.com and
CheapTickets and Trip.com through Cendant's affiliation with Trip Network, Inc.
"We believe that bringing Budget into our family of companies provides numerous
synergies with Cendant's existing lines of business. Beyond the clear cost
efficiencies of combining overhead and administrative functions of Avis and
Budget, adding the Budget brand to our travel mix will allow us to reach
value-conscious travelers more effectively through our timeshare, travel
services and online booking channels," said Henry R. Silverman, chairman,
president and Chief Executive Officer of Cendant.
"This transaction is also consistent with our articulated strategy of making add
on acquisitions in our core travel and residential real estate segments. We
remain committed to our plan to use our free cash flow primarily to reduce
indebtedness," Mr. Silverman concluded.
Sandy Miller, Chairman and Chief Executive Officer of Budget Group, Inc., said,
"As a strategic buyer, Cendant will provide numerous resources to strengthen and
grow Budget's rental operations. In addition, joining forces with Cendant will
allow Budget to operate as an independent brand, enjoy many synergies created by
this transaction and continue serving its customers in the same quality manner."
Cendant and Budget have agreed to assemble a transition team comprised of senior
managers to ensure a seamless integration of the companies. Cendant does not
anticipate changes in Budget's operational management or workforce that would
impact service to customers or suppliers.
Cendant will not assume roughly $750 million of Budget's non-vehicle-related
debt and preferred securities. Budget believes it is unlikely that holders of
its Convertible Subordinated Notes, Trust Preferred Securities, and Common Stock
will receive any distribution or recovery. It is expected that the holders of
Budget Senior Notes will receive a distribution at the conclusion of the
bankruptcy process.
The official committee of unsecured creditors of budget group, inc. stated that
it supports the sale of substantially all of the assets of budget's u.s.,
canadian, latin american and asian-pacific operations to cendant corporation
pursuant to a definitive purchase agreement entered into today by budget and
cendant. the committee has taken the position that the prompt sale of budget's
business is important and likely to maximize the potential recovery to unsecured
creditors. subject to a bankruptcy court auction for higher and better offers to
acquire the business for cash, the committee supports the transaction including
the proposed bidding procedures and the timetable to close the transaction.
Consummation of the transaction remains subject to certain conditions, including
bankruptcy court and regulatory approval outside the United States. The
transaction has received clearance under U.S antitrust regulations. Lazard
Freres & Co. is acting as Budget's exclusive advisor with respect to the sale
process; Salomon Smith Barney is acting as Cendant's financial advisor.
Based on the terms of the transaction, the acquisition is expected to be
accretive to Cendant's earnings per share in 2003. However, Cendant has not yet
provided earnings guidance for 2003.
Statements made in this press release that are not historical in nature may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Those statements include statements
regarding the intent, belief or current expectations of Budget, Cendant and
their respective management teams, as well as the assumptions on which such
statements are based. Forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and actual results may differ
materially from those contemplated by such forward-looking statements. These
risks and uncertainties include factors relating to Budget's restructuring
process (such as the availability of financing over time, the results of the
bankruptcy court consideration of the Cendant transaction and other factors
relating to the ability to complete the sale to Cendant, and the outcome of the
Budget's efforts to sell its operations in Europe, the Middle East and Africa)
as well as matters contained in the Budget's Annual Report on Form 10-K for the
year ended December 31, 2001 and in other documents subsequently filed by Budget
with the SEC, all of which are available from the SEC. The risks and uncertainty
related to Cendant include factors specified in Cendant's Form 10-K/A for the
year ended December 31, 2001.
ABOUT BUDGET GROUP, INC.
Budget Group, Inc. owns Budget Rent a Car Corporation Budget is the world's
third largest car and truck rental. For more information, visit the Company's
Web site at www.budget.com.
ABOUT CENDANT CORPORATION
Cendant Corporation is primarily a provider of travel and residential real
estate services. With approximately 70,000 employees, New York City-based
Cendant provides these services to business and consumers in over 100 countries.
More information about Cendant, its companies, brands and current SEC filings
may be obtained by visiting the Company's Web site at http://www.cendant.com or
by calling 877-4-INFOCD (877-446-3623).
CENDANT MEDIA CONTACTS: BUDGET GROUP MEDIA CONTACT:
Elliot Bloom Kimberly Mulcahy
212-413-1832 630- 955-7672
Ted Deutsch
973-496-7865
CENDANT INVESTOR CONTACTS: BUDGET GROUP INVESTOR CONTACT:
Sam Levenson Sarah Lewensohn
212-413-1834 630-955-7602
Henry A. Diamond
212-413-1920