Cendant Plans IPO For Real Estate Web Site
(Reuters) - Franchising giant Cendant Corp. said Thursday it plans to launch a real estate service Web site, rivaling hot upstart HomeStore.com Inc. , and create a separate stock to track the unit's performance.
Cendant said the tracking stock on its CompleteHome.com business will be offered to investors through an initial public offering in the second quarter of 2000.
In preparation, the New York-based company will file a proxy statement with federal securities regulators by the end of the year. Cendant said it would start reporting financial results for CompleteHome in its third-quarter earnings statement.
``Over the past five years, Cendant has assembled an unmatched value circle of real estate companies,'' said Richard Smith, chief executive of Cendant's real estate division. ''Through CompleteHome.com, we will now be able to further accelerate the off-line success of these companies by harnessing the full power of the Internet.''
The move comes as Cendant continues to sell nonstrategic assets. The company, which franchises real estate names like Coldwell Banker and Century 21 brokers, created a company two weeks ago to handle its online businesses.
Cendant also recently filed suit seeking $300 million in damages from the newly public Internet real estate service HomeStore.com, alleging that the start-up failed to honor a commitment to issue Cendant some stock.
Shares of Cendant were up 44 cents to $17.81 in afternoon trade on the New York Stock Exchange, below its 52-week high of $22.56 but above the 52-week low of $6.50.
HomeStore's stock dipped after the Cendant announcement. Analysts said Cendant's site could be a fierce competitor to HomeStore's family of real estate Web sites. The stock was down $2.25 to $48.625.
Cendant declined to comment on HomeStore's stock activity. HomeStore officials were not available to comment.
``Cendant's CompleteHome is a much more robust portal,'' said Michael Millman, an analyst with Salomon Smith Barney. ``It offers not only a direct competitor but it offers a lot of other sites as well.''
Cendant describes CompleteHome.com as a Web portal for real estate professionals, such as brokers and agents, as well as consumers. The site should be launched in December and will integrate the online efforts of Cendant's real estate brands and business units.
It will draw on Cendant's Rent Net online apartment guide as a business model. That unit's operations are being expanded as the technology base for CompleteHome, Cendant said.
The new class of common stock will track the performance of CompleteHome.com. Such ``tracking stocks'' normally pay dividends based on the operating performance of a particular segment of a company. They trade alongside a company's regular shares.
Sara Nolan was named chief executive officer of the real estate site. Most recently, Nolan worked for Hambrecht & Quist LLP as president and chief executive of OptionsLink, the Web-based manager of employee stock options.
She was also chairman and chief executive of Narrowline, an Internet advertising exchange and research company.