Cendant, the US travel and real estate group, appeared to be close to selling its marketing services unit, which some analysts have estimated could fetch more than $2bn.
Private equity group Apollo Management was seen as the most likely buyer of the unit, with a deal possible as early as next week, said people familiar with the matter. However, insiders cautioned that Bain Capital and other bidders remained in the process and that, in any event, negotiations could still fall apart.
A sale of its marketing services unit would represent the latest restructuring move on the part of Cendant, which is trying to focus on its core businesses, which include brands such as Avis car rental, online travel agents Orbitz and Ebookers, and hotel chains Howard Johnson and Ramada.
Cendant’s marketing services (CMS) unit involves partnerships with various institutions, using mail, online and telemarketing to sell products and services to customers.
It includes Trilegiant and Trilegiant Solutions, a membership club and loyalty programme that targets travel, health and dental; Progeny, which markets checking accounts and other products for banks; and Cendant International Marketing, which is similar to Progeny but focused on the UK. Cendant has for months made clear its plans to divest CMS this summer.
The unit last year generated $1.49bn in revenue. By comparison, the travel services unit earned revenue of $1.78bn and real estate franchise operations $6.24bn. Earnings before interest from marketing services last year totalled $341m.
Cendant, which declined to comment, will announce second-quarter earnings on July 25.
The sale of Cendant’s marketing services unit is one of two private equity auctions that seem to be entering their final stages this weekend. Final bids for the semiconductor products unit of Agilent, the California-based technologies, were due on Friday, according to people familiar with the matter.
Last Monday, the Wall Street Journal reported that Kohlberg Kravis Roberts and Silver Lake Partners; Bain Capital and Warburg Pincus; and CVC Partners, Francisco Partners and Texas Pacific Group were competing for the unit. The technology industry witnessed the largest private equity deal of the year so far when a group of seven buy-out firms agreed in March to purchase SunGard Data Systems for $11.3bn.
Cendant shares closed down 0.5 per cent at $22.10 on Friday.