SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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December 18, 1997 (December 17, 1997)
(Date of Report (date of earliest event reported))
PHH Corporation
(Exact name of Registrant as specified in its charter)
Maryland 1-7797 52-0551284
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or organization) Identification Number)
6 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive office) (Zip Code)
(973) 428-9700
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if applicable)
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Item 1. Changes in Control of Parent of Registrant
On December 17, 1997, pursuant to a merger agreement between CUC International
Inc. ("CUC") and HFS Incorporated ("HFS"), HFS was merged into CUC, with CUC
being the surviving corporation (the "Merger") and changing its name to "Cendant
Corporation". As a result of the Merger, PHH Corporation will become a wholly
owned subsidiary of Cendant Corporation. A copy of the joint press release
issued by CUC and HFS is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibits
99.1 Joint Press Release issued by CUC International Inc. and HFS
Incorporated on December 18, 1997 announcing the completion of
the merger of CUC International Inc. and HFS Incorporated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Corporation has duly caused this report to be on its behalf by the undersigned
hereto duly authorized.
PHH CORPORATION
By: /s/: James E. Buckman
James E. Buckman
Senior Executive Vice President
Date: December 18, 1997
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PHH INCORPORATED
CURRENT REPORT ON FORM 8-K
Report Dated December 18, 1997 (December 17, 1997)
EXHIBIT INDEX
Exhibit No. Description
99.1 Joint Press Release issued by CUC International Inc. and HFS
Incorporated on December 18, 1997 announcing the completion of
the merger of CUC International Inc. and HFS Incorporated.
EXHIBIT 99.1
MERGER OF CUC AND HFS IS COMPLETED, VALUED AT $14 BILLION --
COMBINATION FORMS CENDANT CORPORATION (NYSE: CD)
Consumer Brands, Membership Services and Online Commerce Prowess Create
a Global Marketing Leader
Powerful Cross-Marketing and Purchasing Leverage
Across Business Segments: Travel, Real Estate, Membership Services
Positioned for Strong Revenue and Earnings Growth
Stamford, CT and Parsippany, NJ, December 18, 1997 - CUC International
Inc. and HFS Incorporated today said that their previously announced merger has
consummated, officially creating Cendant Corporation. As of today, Cendant will
be listed as "CD" on the New York Stock Exchange.
Henry R. Silverman, President and Chief Executive Officer of Cendant,
said, "Cendant arrives at the global marketplace as the world's premier consumer
and business services company, with strong growth prospects. With numerous
brands and a world-class marketing machine, we offer consumers and businesses a
value proposition that we believe is unmatched by any other company. We
currently have over 73 million memberships, as well as more than 100 million
consumer contacts each year in our various business segments, enabling us to
leverage our marketing prowess and purchasing power."
Walter A. Forbes, Chairman of Cendant's Board of Directors, stated, "We
believe this merger enables us to leverage our customer base and marketing
expertise to create unparalleled growth opportunities across all lines of
business. Working together over the past six months, we have become even more
excited about the synergies and efficiencies that we can achieve as a combined
company. We will continue to be forward looking, moving quickly to create
opportunities to increase revenue and profit growth and enhance shareholder
value."
Pursuant to the companies' merger agreement, 2.4031 shares of CUC
International common stock will be exchanged for each outstanding share of HFS
Incorporated common stock in a pooling-of-interests transaction. Cash will be
paid in lieu of any fractional shares. CUC will issue approximately 440 million
shares of common and common equivalent stock valued at about $14 billion.
Cendant Corporation will have approximately 900 million common shares
outstanding on a fully diluted basis. The market capitalization of Cendant is
approximately $29 billion, making it among the 100 largest U.S. corporations,
based upon market capitalization. The Company, with more than 30,000 employees,
operates in over 100 countries and is headquartered in Stamford, CT and
Parsippany, NJ.
Based on the pro forma performance of the two companies for the CUC
fiscal year ended January 31, 1997 and the HFS fiscal year ended December 31,
1996, and giving effect to the companies' respective acquisitions during these
periods, Cendant had revenues of approximately $4.5 billion, Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) of $1.3 billion, net
income of approximately $600 million and earnings per share of $0.70. Cendant
will operate on a calendar year basis for financial reporting and tax purposes;
the Company expects to report results for the fourth quarter and the year ended
December 31, 1997 in early February, 1998.
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The Company will recognize, in the fourth quarter, a one-time restructuring
charge related to the Cendant merger of approximately $825 million
(approximately $560 million after tax). The charge also includes transaction and
restructuring costs related to the Hebdo Mag International Inc. acquisition.
Cendant's primary business segments include:
o Travel. Cendant is the leading franchisor of hotels and rental
cars worldwide, the premier provider of vacation exchange
services and the second largest fleet management company.
Brands include Days Inn(R), Howard Johnson(R), Ramada(R),
Avis(R) and Resort Condominiums International.
o Real Estate. Cendant is the premier franchisor of real estate
brokerage offices, a major provider of mortgage services and a
global leader in corporate employee relocation. Brands include
CENTURY 21(R), Coldwell Banker(R) and ERA(R).
o Membership. Cendant provides access to travel, shopping, auto,
dining, financial and other services to over 73 million
memberships worldwide in more than 20 consumer service
programs.
Cendant also has a strong international membership base, an
international classified advertising business as well as a presence in the
financial services industry sector. The Company also is a leader in the
education and entertainment software business.
The Company, in addition to enjoying increased purchasing power and
other efficiencies of scale, is also positioned for cross-marketing
opportunities as a result of linking its brand names, consumer reach, direct
marketing expertise and global club membership base. Cendant has an unmatched
ability to offer products and services to consumers at the precise moment they
are most predisposed to make those purchases.
The Company also announced that, prior to the merger, the Federal Trade
Commission accepted for public comment a Consent Decree related to CUC's
divestiture of its timeshare exchange subsidiary, Interval International Inc.,
and Interval's affiliates, and that the divestiture of Interval International
has been completed as contemplated by the Consent Decree.
Cendant Corporation is a global provider of consumer and business
services. The Company operates in three principal segments: Membership, Travel
and Real Estate. In Membership Services, Cendant provides access to travel,
shopping, auto, dining and other services through more than 73 million
memberships worldwide. In Travel Services, the Company is the leading franchisor
of hotels and rental car agencies worldwide, the premier provider of vacation
exchange services and the second largest fleet management company. 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. A pioneer in interactive
shopping, Cendant is a major online commerce facilitator, with more than $1
billion in yearly sales through its NetMarket(R) and other interactive services.
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This release contains certain forward-looking statements that involve
potential risks and uncertainties. The companies' future results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, changes in market
conditions, effects of state and federal regulations and risks inherent in
international operations. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of today. The companies
undertake no obligation to revise or update these forward-looking statements to
reflect events or circumstances that arise after today or to reflect the
occurrence of unanticipated events.
