Royal Automobile Club Members Approve First Step
19 June 1998
Royal Automobile Club Members Approve First Step in RAC Motoring Services Sale to Cendant
STAMFORD, CT, and PARSIPPANY, N.J.--June 19, 1998 -- Cendant Corporation announced today that members of the Royal Automobile Club ("RAC") approved by an overwhelming majority the first stage of the two-step process to implement the sale of RAC Motoring Services to Cendant for 450 million, or approximately $730 million in cash. The sale has the strong unanimous support of the RAC's Board of Directors.Today's vote means that RAC Members have now approved a reorganization of the RAC Group which is expected to become effective on July 7, 1998. The second and final stage of the process involves the sale of Motoring Services to Cendant. The second stage will immediately follow the reorganization, and requires a second vote which is expected to take place later this summer.
Brian McGivern, Chairman of the Royal Automobile Club, said, "Our members have today clearly demonstrated their strong support for the proposed sale of Motoring Services to Cendant. We are delighted with the result and look forward to the final vote on the sale, which should take place in August, and hope to complete the transaction as soon as possible."
Stephen P. Holmes, Cendant Vice Chairman, said, "We are pleased that the acquisition is progressing on schedule and look forward to the completion of our purchase of RAC Motoring Services."
As previously announced, Cendant said it expects the acquisition of RAC Motoring Services would be immediately accretive to its earnings per share, and that it would utilize its funded bank debt to pay for the acquisition.
Cendant is the world's premier provider of consumer and business services. Cendant operates in three principal segments: Alliance Marketing, Travel and Real Estate Services. In Alliance Marketing, Cendant provides access to travel, shopping, auto, dining, and other services. In Travel Services, Cendant is the leading franchisor of hotels and rental car agencies worldwide; the premier provider of vacation exchange services; a leading fleet management company through PHH; the UK's largest private car park operator through NCP, and a leading motorist assistance group in the UK through Green Flag. In Real Estate Services, Cendant is the world's premier franchisor of residential real estate brokerage offices, a major provider of mortgage services to consumers and a global leader in corporate employee relocation. Headquartered in Stamford, CT and Parsippany, NJ, the company has more than 40,000 employees, operates in over 100 countries and makes approximately 100 million customer contacts annually.
Cendant serves the U.K. auto and travel market through PHH, NCP and Green Flag, as well as its alliance marketing and RCI units.
Cendant's Alliance Marketing division also markets a variety of value-added membership programs in Europe. Since acquiring its European licensing rights in 1996, the Company has more than doubled its international membership every year. Cendant currently serves over seven million international memberships through agreements with fourteen major European banks.
Cendant's RCI unit is the world's largest timeshare exchange company, with more than 2.4 million member families worldwide and 200,000 in the U.K. alone. Through RCI, timeshare owners can swap the weeks they own and spend a vacation at one of over 3,200 timeshare properties in 89 countries worldwide.
RAC Motoring Services operates in three principal segments--The RAC, the U.K.'s second largest roadside assistance company with over 6 million associate members, including 2.7 million under fleet programs and car manufacturers warranty programs and 2.9 million direct individual members, and London Wall Insurance, a provider of auto warranty products. RAC Motoring Services also owns the British School of Motoring (BSM), the U.K.'s largest driving school company. Sales for 1997, adjusted for the acquisition of BSM, were approximately $500 million.
