Real estate franchise giant Cendant Corp. on Tuesday said its chairman and CEO Henry R. Silverman increased his stock ownership in the company by exercising about 5 million stock options that were set to expire on Jan. 22, 2006.
The transaction brings Silverman’s overall direct share ownership in Cendant to 9.24 million shares, up from 8 million shares previously, and his option holding to 25 million options, which expire between 2007 and 2011, down from 30 million options.
The move came one day after the company announced plans to split into four independent publicly traded companies in 2006. The new companies will consist of one each for Cendant’s real estate, travel distribution, hospitality and vehicle rental businesses.
Following the breakup, Silverman will continue to lead the travel distribution company and serve as non-executive chairman of the newly formed real estate services division, which will be headed by Richard A. Smith.
In real estate, Cendant owns the Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby’s International Realty brands. The company in August reported a 37 percent increase in real estate brokerage offices under the Cendant umbrella. At that time, the five Cendant brands encompassed 14,364 residential and commercial franchised real estate offices in 58 countries and territories around the globe. Collectively, there were more than 300,000 real estate professionals affiliated with the Cendant brands in August.
Cendant said the breakup is aimed at boosting its stock value.
Cendant also this week reported third-quarter net income of $514 million, or 44 cents a share, compared with $593 million, or 47 cents a share, a year earlier. Analysts had predicted 46 cents a share.
Third-quarter revenue totaled $5 billion, an increase of 12 percent over third quarter 2004, reflecting growth in the company’s core real estate and travel services businesses, the company said.
Cendant stock (NYSE: CD) traded at $18.09 a share this morning, down 1.7 percent from Tuesday’s closing price of $18.41.
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