Liberty Media to Invest in, Partner With Cendant

Cendant Corp., franchiser of Days Inn hotels and Century 21 realty, said Thursday it will get a $400-million investment from Liberty Media Corp., part of a venture to develop television and Internet programming linked to Cendant’s businesses.

Liberty Media, AT&T; Corp.’s cable-programming arm, will receive a 2.5% stake in Cendant and two-year warrants to buy an additional 4% at $23 a share.

The news sent Cendant shares climbing $6.56, or nearly 40%, to close at $23 in heavy trading on the New York Stock Exchange.

Cendant Chairman Henry Silverman is teaming with Liberty Media’s John Malone to provide high-speed Internet access and cable programming to Cendant’s hotel franchises, including Days Inn, Howard Johnson, Ramada and Travelodge. Cendant will target AT&T;’s 12 million cable subscribers with its direct-marketing programs and tap Liberty’s expertise to improve its Web sites.

Malone will buy 1 million shares of Cendant, which also owns travel, mortgage, real estate and membership businesses such as Avis rental car, Shoppers Advantage marketing, Coldwell Banker real estate and the CompleteHome.com real estate Internet site. He’ll also join Cendant’s board.

Cendant’s shares have fallen from a high of $41.69 in April 1998 and were down 15% this year before Thursday. The New York-based company earlier this month agreed to pay $2.83 billion to settle a class-action lawsuit that accused it of defrauding shareholders.

Cendant was formed in 1997 by the combination of CUC International Inc., a direct-marketing company, and HFS Inc., a hotel franchiser. Shareholders sued last year after Cendant said accounting irregularities had inflated earnings at CUC.