Realogy Corp., the former Cendant Corp. real estate firm known for its Coldwell Banker franchise, said it agreed to be bought by private equity firm Apollo Group for about $6.65 billion, plus debt and other liabilities.
Realogy, which says it is the world’s largest real estate franchiser, was spun off from Cendant in August as part of that firm’s decision to break itself up into four companies. Cendant has since changed its name to Avis Budget Group Inc.
Realogy said Apollo will pay $30 per share -- an 18 percent premium to Friday’s $25.50 close and a 26 percent premium to Realogy’s average closing price since its spin-off.
Parsippany, New Jersey-based Realogy, which owns Coldwell Banker, Century 21 and Sotheby’s International Realty and offers real estate brokerage, relocation and title services, said the deal was worth about $9 billion overall, including debt of $1.6 billion and other liabilities of $750 million.
The deal comes amid an increase in buyouts of public companies, and as private equity firms look to invest the hundreds of billions of dollars they have raised in a wider variety of areas.
Cendant is known for having lost $14 billion in market value in 1998 after it disclosed that it falsified earnings, marking one of the accounting scandals in the late 1990s that shook the U.S. corporate world. The falsified earnings were discovered at CUC, the company that Cendant predecessor HFS merged with ahead of being renamed Cendant.
The company said it expects Chief Executive Henry Silverman, who once ran HFS, to stay on until the end of next year when he will be replaced by President Richard Smith. It said it did not expects other senior managers to leave.
Silverman is not an equity participant with Apollo in the acquisition, the company said. He owns 2.3 million shares, according to an August regulatory filing, which would be worth $69 million under the deal terms.
The New York Times reported he stands to make $135 million in stock and options sales. A company spokesman declined to confirm the figure.
Apollo has financing from JP Morgan, Credit Suisse and Bear Stearns and has committed to providing $2 billion of equity. It expects to close the deal in the spring of 2007.
Realogy may solicit alternative proposals from third parties until Feb. 14 and can respond to unsolicited proposals at any time.
Evercore Partners advised Realogy while JP Morgan and Credit Suisse were financial advisers to Apollo.