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Non-Tech : Cendant Corporation (NYSE:CD) -- Ignore unavailable to you. Want to Upgrade?

To: VALUESPEC who wrote (1612)	8/18/1998 8:10:00 AM
From: John Carragher	Respond to of 3627

August 18, 1998 Cendant May Use Less Stock To Purchase Miami Insurer By EMILY NELSON Staff Reporter of THE WALL STREET JOURNAL Cendant Corp. said it may change the terms of its $3.1 billion acquisition of American Bankers Insurance Group Inc. to include more cash and less stock. The marketing and franchising concern has seen its stock price plummet more than 50% since agreeing on March 23 to buy the Miami insurer. In a Securities and Exchange Commission filing, Cendant offered several possible ways to change the transaction, including paying more cash or funding part of the transaction with proceeds from the sale of businesses. The company has said it expects to close the American Bankers acquisition late in the fourth quarter or in the 1999 first quarter. It could change how it pays for the insurer any time, the company said. Under the terms of the agreement, American Bankers shareholders are to receive $67 a share in a combination of 51% cash and 49% stock. Investors have called on Cendant to change the terms of the acquisition, worrying that the company would have to issue many more shares than originally planned because of its much lower share price. Issuing more shares could dilute the company's earnings per share. In a conference call late last week, Cendant's chief executive, Henry R. Silverman, told investors, "We hear you. Let me repeat, we hear you." He added that Cendant won't make any changes that "endanger" its credit ratings or its relations with insurance regulators, who must approve the acquisition. Mr. Silverman also said Cendant could repurchase shares to address any potential dilution of earnings from the acquisition. Cendant disclosed in April that it had discovered accounting problems at its core membership businesses, forcing it to restate the past three years of results. The Parsippany, N.J., company said it could use proceeds from shedding two businesses, its publisher of classified advertising and its software operations. Last week, Cendant agreed to sell the publishing unit for about $523 million in cash and stock, and it says it is considering a sale of or public offering of stock in its software business. In New York Stock Exchange composite trading, Cendant shares fell 43.75 cents to $16.3125, while American Bankers shares rose 12.5 cents to $59.6875. Return to top of page \| Format for printing Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.