Cendant Corp. is reportedly close to a blockbuster $1.2-billion deal to buy Orbitz, the online travel service controlled by a consortium of airlines.
The all-cash deal is in its final stages, and executives close to the talks said they hope to announce it as early as this morning, according to the New York Times and the Wall Street Journal.
Cendant will pay $26 to $28 a share for Orbitz, the executives said. That represents a hefty premium over Tuesday's closing price of $20.77. The reports came out after the market closed, and by 6 p.m. Orbitz stock was selling at $26.39 in after-hours trading. Cendant shares fell 45 cents from their closing price of $22.02.
The boards of both companies were planning to meet separately Tuesday night to approve the transaction, the reports said.
A Cendant spokesman did not return a call for comment.
Cendant has a market capitalization of $22.4-billion and operates Galileo, a computerized reservation and electronic distribution system for the travel industry.
But Orbitz is bigger and better known, and would be a strong addition to a travel business that includes several major hotel chains, including Ramada, Howard Johnson and Days Inn, as well as Avis and Budget car rental companies and CheapTickets.com.
The company's growth has been fueled by acquisitions. It has slowed somewhat in recent years to refocus on its travel and real estate segments while selling off noncore businesses.
Orbitz was formed in 2000 by American, Continental, Delta, Northwest and United airlines to create a competitor to Expedia and other online ticketing sites. The company went public in December at $26 a share, but was trading as low as $16.35 in August.