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HolidayBuyer's Guide
Tech Industry

Cendant shares rise on Liberty Media investment

Cendant Corp. (NYSE: CD) shares rallied up 4 7/8, or 30 percent, to 21 5/16 Thursday after Liberty Media Corp. (NYSE: LMGa) said it will invest $400 million in the hotel and travel services company to develop more Internet business opportunities.

"Cendant's group of assets is a terrific platform for developing new businesses," said Liberty Media CEO Robert Bennett in a prepared release.

Cendant said it will assist Liberty Media in creating a venture to provide broadband video, voice and data content to Cendant hotels and their guests on a worldwide basis. The two companies will also pursue cable television opportunities which leverage Cendant's direct marketing resources.

Liberty Media's cash investment will purchase 18 million Cendant common shares, as well as two-year warrants to purchase about 29 million Cendant common shares at $23 per share, its statement said.

Liberty Media shares picked up 11/16 to 47 5/16 Thursday.

Cendant shares went into a tailspin in 1998 after a series of accounting missteps and management changes caused Wall Street to lose faith.

Earlier this month, Cendant agreed to pay $2.83 billion to settle a shareholder lawsuit accusing former executives of securities fraud.

Last quarter, it earned $208.7 million, or 31 cents a share, on sales of $1.4 billion.

First Call consensus expects it to earn 28 cents a share in the fourth quarter and $1.03 a share in the fiscal year.

Under terms of the investment, Cendant also said Liberty Media's chairman, John Malone, will join Cendant's board of directors. Malone has agreed to purchase 1 million Cendant shares.

Cendant shares moved up to a high of 22 5/8 in July before falling to a 52-week low of 13 5/8 in November.

Reuters contributed to this report.>