Rule 425
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Filer: Fairfield Communities, Inc.
Subject Company: Fairfield Communities, Inc.
Subject Company Exchange Act File No. 1-8096
This document is being filed pursuant to Rule 425 under the Securities Act of
1933 and is deemed filed pursuant to Rule 14a-12 under the Securities Exchange
Act of 1934.
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FOR IMMEDIATE RELEASE
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Cendant Corporation To Acquire Fairfield Communities,
Inc. For Approximately $635 Million In Cash Or Cash
And Stock
Acquisition Expected to be Immediately Accretive to Cendant's Earnings
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Fairfield Will Expand Cendant's RCI Vacation Exchange Business
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New York, NY and Orlando, FL, November 2, 2000 - Cendant Corporation
(NYSE:CD) and Fairfield Communities, Inc. (NYSE: FFD) today announced that
they have signed a definitive agreement for Cendant to acquire all of the
outstanding common stock of Fairfield Communities at $15 per share, or
approximately $635 million in aggregate. At least 50% of the consideration
will be in cash; the balance will either be in cash or Cendant common stock,
at Cendant's election. The final acquisition price may increase to a
maximum of $16 per share depending on a formula based on the average trading
price of Cendant stock over a twenty trading day period prior to the closing
of the transaction. The transaction is subject to customary conditions and
the approval of Fairfield's shareholders.
The acquisition is expected to be immediately accretive to Cendant earnings
and is expected to close in early 2001.
Fairfield Communities, with more than 324,000 vacation-owning households, is
the largest vacation ownership company in the United States, marketing and
managing resort properties at 33 locations in 12 states and the Bahamas.
This year over 625,000 families will visit Fairfield resorts. Fairfield
operates over 32 dedicated sales centers and manages over 110 timeshare and
whole ownership resort associations.
For the twelve months ended September 30, 2000 Fairfield recorded revenues
of approximately $560 million, an 18% increase over the comparable twelve
months ended September 30, 1999. Net earnings for the twelve months ended
September 30, 2000 rose over 20% to approximately $64 million as compared
with $53 million in the prior period.
Cendant Chairman, President and CEO, Henry R. Silverman stated: "Fairfield
is known throughout the resort industry for its strong management and
outstanding sales and marketing capabilities. This acquisition will enable
Cendant to expand our timeshare product offerings to our customers:
timeshare developers. We can now offer Fairfield's proven systems along
with Cendant's own core competencies in vacation exchange, travel agency,
consulting and technology to current and prospective affiliates within the
vacation ownership industry."
Stephen P. Holmes, Chairman, Cendant Travel Division, said: "Since we
purchased RCI in 1996, timeshare has been an important core element in our
Travel Division. Expanding our presence in this fast-growing industry with
one of the recognized leaders will position us to accelerate the Travel
Division's growth."
Fairfield President and CEO, Jim Berk stated: "This acquisition combines
Cendant's infrastructure and global network systems with Fairfield's core
competencies of sales and marketing, resort management, and consumer
financing. Together we have all the components necessary to drive
significant growth in the vacation ownership industry."
The definitive agreement provides that if Cendant elects to use its common
stock as merger consideration, within a range of Cendant stock prices, the
number of Cendant common shares to be issued per share of Fairfield
Communities common stock will be increased to maintain the value of the
consideration to be paid at $15 per share. Furthermore, if Cendant's stock
price increases prior to closing of the transaction, the value of the
consideration to be paid to Fairfield Communities shareholders will
increase, but shall not exceed $16 per share.
As part of the transaction, Fairfield may, at the request of Cendant, spin
off the property development portion of its business to Fairfield
shareholders prior to the completion of the transaction. The new
independent property development company would continue to serve as a
developer of timeshare resorts. Cendant would serve as the exclusive sales
and marketing agent for such facilities and would also provide property
management and consumer financing services. The definitive agreement also
permits Cendant, at its option, to modify or eliminate the spin-off by
Fairfield Communities of its property development business.
An investor conference call and simultaneous Webcast to discuss this
transaction will begin promptly at 11:00 a.m. on November 2, 2000. The dial-
in period will commence at 10:45 a.m. The dial in number is (800) 314-7867.
To listen to the Webcast, visit the Investor Center portion of the Cendant
Web site (http://www.cendant.com) and install the necessary audio software.
A replay of the call will be available beginning at 2:00 p.m. on November 2,
2000 by dialing (719) 457-0820 (access code 774344) or by visiting
http://www.cendant.com. The telephone replay will be available until 8:00
p.m. on November 6, 2000.
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. These statements are not guarantees of
future performance. They involve a number of risks and uncertainties that
are difficult to predict including the outcome of litigation. 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 Form 10-K for the year
ended December 31, 1999 for Fairfield and in the Form 10-Q for the quarter
ended June 30, 2000 for Cendant.
Cendant Corporation is a global provider of real estate, travel and direct
marketing related consumer and business services. The Company's core
competencies include building franchise systems, providing outsourcing
solutions and direct marketing. As a franchiser, Cendant is among the
world's leading franchisers of real estate brokerage offices, hotels, rental
car agencies, and tax preparation services. As a provider of outsourcing
solutions, Cendant is a major provider of mortgage services to consumers,
the global leader in employee relocation, and the world's largest vacation
exchange service. In direct marketing, Cendant provides access to
insurance, travel, shopping, auto, and other services primarily to customers
of its affinity partners. Other business units include NCP, the UK's
largest private car park operator, and Wizcom, an information technology
services provider. Headquartered in New York, NY, the Company has
approximately 28,000 employees and operates in over 100 countries.
More information about Cendant, its companies, brands and current SEC
filings may be obtained by calling 877-4INFO-CD (877-446-3623) or by
visiting the Company's web site at www.cendant.com <http://www.cendant.com>.
Additional information about Fairfield Communities, Inc. can be obtained by
visiting the company's web site at www.efairfield.com
<http://www.efairfield.com>.
In connection with the proposed transaction, Cendant Corporation will file a
Registration Statement on Form S-4 and Fairfield Communities, Inc. will file
a Proxy Statement, each with the Securities and Exchange Commission.
Investors and security holders are advised to read the registration
statement on Form S-4 and the Proxy Statement when they becomes available,
because they will contain important information. Investors and security
holders may obtain a free copy of the Registration Statement on Form S-4 and
the Proxy Statement (when available) and other documents filed by Cendant
Corporation and Fairfield Communities with the SEC at the SEC's web site at
http://www.sec.gov. Free copies of the Registration Statement on Form S-4,
once available, and Cendant Corporation's other filings with the SEC may
also be obtained from Cendant Corporation via its web site at
http://www.cendant.com or by directing a request to Investor Relations,
Cendant Corporation, 9 West 57th Street, New York, NY 10019. Free copies of
the Proxy Statement filed by Fairfield Communities may be obtained by
directing a request to Investor Relations, Fairfield Communities, 8669
Commodity Circle, #200, Orlando, FL 32819.
FOR CENDANT FOR FAIRFIELD
Media Contact Media Contact
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Elliot Bloom Stacey Nield or Steve DiMattia
212-413-1832 Morgen-Walke Associates
212-850-5600
Investor Contacts Investor Contact
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Sam Levenson Robert W. Howeth
212-413-1834 Chief Financial Officer
407-370-5250
Denise Gillen
212-413-1833
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Fairfield, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Fairfield security
holders in favor of the adoption of the proposed transactions. A description
of any interest that Fairfield's directors and executive officers have in
these transactions will be available in the Proxy Statement, which may be
obtained without charge at the SEC web site at http://www.sec.gov.
