Cendant Drops Spinoff, Forms Trilegiant Corp.

Cendant Corp., franchiser of such businesses as Days Inn hotels and Avis car rental, said it ended a plan to spin off much of its membership-based business and instead formed a management-owned company to run the operations.

The move will result in earnings for 2002 of $1.35 a share to $1.40 a share, the New York-based company said. Wall Street was expecting earnings of $1.14, according to First Call/Thomson Financial.

Cendant’s individual membership and loyalty businesses operate clubs that offer discounts on services to fee-paying members.

The new management company is called Trilegiant Corp. Cendant said it acquired $20 million in convertible preferred stock of Trilegiant, which is convertible to a 20% stake.

The new plan allows Cendant to retain ownership of a business that generated $728 million in revenue in 2000, analysts said.

Cendant closed up 61 cents at $20.11 on the NYSE.