Travel and real estate franchising firm Cendant Corp. confirmed today that it is in talks to acquire Galileo International Inc., a computerized travel reservations company.
New York-based Cendant made the announcement in response to media reports that a deal was in the works.
In a statement, Cendant said that "terms of the transactions were not disclosed, and there can be no assurance that a transaction will be consummated."
Cendant said that, if completed, its acquisition of Rosemont, Ill.-based Galileo could "materially add to Cendant's earnings per share in 2002." Cendant owns hotel chains that include Ramada, Days Inn and Super 8 and the rental-car company Avis Group Holdings.
Cendant said the companies wouldn't make any further public announcements unless a definitive agreement is reached. A Galileo spokeswoman also said the company wouldn't making any further comment, and a Cendant spokesman didn't return a phone call by deadline.
In October, Galileo, which operates one of the travel industry's big computerized reservation systems, put itself on the market to potential buyers. Galileo processes more than 350 million transactions annually through its reservation system and has locations in 107 countries.
Galileo officials said they decided to examine different options for improving shareholder value because they didn't think the stock market was "appropriately valuing our consistent financial performance, cash-flow generation and excellent growth prospects."
At the time, Galileo said it had no timetable for agreeing to a possible deal and said it would look at other alternatives besides a leveraged buyout or a sale to another company.
Galileo grew from UAL Corp.'s United Air Lines Inc. in the 1960s and merged in 1993 with the distribution arms of various European air carriers to form the existing company.