Hold that spinoff! Cendant's (NYSE:CD) plans to split its business up into four bite-sized pieces may have hit a welcome snag now that unsolicited offers are pouring in for the travel subsidiary.
The Motley Fool Inside Value recommendation is now looking to explore those buyout alternatives instead of spinning off the division in the fall. Cendant's travel business includes the popular Galileo global distribution system for travel agents and hoteliers and the consumer-driven Orbtiz.com site.
After spinning off its PHH (NYSE:PHH) mortgage management company last year, Cendant was set on unlocking the value of its shares by breaking itself up into four chunks. Beyond the travel distribution subsidiary, Cendant's other publicly traded entities would include its real estate operations, hospitality, and car rental services.
This may seem an odd time for a travel-related bidding war. IAC/InterActive (NASDAQ:IACI) spun off Expedia (NASDAQ:EXPE) last summer, and Expedia's stock has shed a third of its value since then. Shares of Travelocity parent Sabre (NYSE:TSG) and Stock Advisor recommendation Priceline.com (NASDAQ:PCLN) have small price gains over the last year, but certainly not the kind of appreciation that would lead one to believe that a bidding war was about to break out for Cendant's travel arm.
Then again, maybe the unsolicited offers aren't limited to just the usual suspects. Major portals like Yahoo! (NASDAQ:YHOO) and AOL.com have been beefing up their travel offerings, and who knows if one of the cash-rich search giants may be eyeing Orbitz, if only to keep it from the others.
It's a space worth watching. And now that Cendant has opened the door for the sale of one of its proposed spinoffs, it's quite possible that the right offers can secure some of Cendant's other pieces. By this time next year, we may not be staring at four publicly traded pieces of Cendant, but just one -- or none -- as Cendant warms up to the bidding block.
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Longtime Fool contributor Rick Munarriz has used Orbitz for travel bookings. He does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
