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Cendant and RAC Motoring Services Merger Put On Hold

4 February 1999

UK Secretary of State for Trade and Industry Requires Divestiture Of Green Flag Unit Before Cendant and RAC Motoring Services Merger Can Proceed

     Company Says Divestiture of Green Flag is an Unacceptable Condition

   Cendant Says RAC Valuation Was Based on Future Synergies with Green Flag

    NEW YORK, Feb. 4 -- Cendant Corporation today
announced that the UK Secretary of State for Trade and Industry has cleared
its proposed acquisition of RAC Motoring Services on the condition that
Cendant divests its Green Flag breakdown assistance business.  Cendant does
not regard the proposed condition as reasonably acceptable or commercially
feasible and therefore it is the Company's intention not to proceed with the
acquisition of RAC Motoring Services.
    Stephen P. Holmes, Cendant Corporation vice chairman, stated:
    "At the outset, we explained to the MMC that the divestiture of Green Flag
would not be acceptable.  Thus, we have informed the RAC that we do not regard
the condition described by the Secretary of State as acceptable and, for that
reason, we are unable to proceed with the acquisition of RAC Motoring
Services.  Our valuation of RAC Motoring Services was driven by future
synergies between the RAC and Green Flag businesses, which would have resulted
in cost savings to benefit our shareholders and service improvements to
benefit RAC and Green Flag members.  However, our intention is now to build on
the already successful record of Green Flag and to provide a strong and
vigorous competitor to the RAC, the AA and others in the UK breakdown services
market.  We will utilize the funds committed to the RAC transaction to further
reduce debt and repurchase Cendant shares."
    Cendant Corporation is one of the world's foremost providers of consumer
and business services.  The Company operates in three principal divisions:
Travel Services, Real Estate Services and Alliance Marketing.  In Travel
Services, Cendant is the leading franchisor of hotels and rental car agencies
worldwide; 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 relocation.  In Alliance Marketing, Cendant provides access
to insurance, travel, shopping, auto, and other services, primarily through
direct marketing to customers of its affinity partners.  Headquartered in
New York, NY, the Company has more than 35,000 employees and operates in over
100 countries.
    Statements about future results made in this release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.  These statements are based on current
expectations and the current economic environment.  The Company cautions that
these statements are not guarantees of future performance.  They involve a
number of risks and uncertainties that are difficult to predict.  Actual
results could differ materially from those expressed or implied in the
forward-looking statements.  Important assumptions and other important factors
that could cause actual results to differ materially from those in the
forward-looking statements are specified in the Company's Prospectus
Supplement dated November 24, 1998.