Homestore Acquiring Move.com

Homestore.com Inc. is acquiring Cendant Corp.’s
Internet real estate portal move.com in a $761 million deal that creates such
a large online presence that the Justice Department will conduct an antitrust
review before the closing.

Homestore.com said the acquisition will create “the largest … marketplace for
home and real estate-related products and services on the Internet.”

Cendant assets to be integrated into Homestore.com’s network of Web sites
include move.com, apartment locator site Rent Net, direct marketing company
Welcome Wagon and other sites.

Cendant was up 62 cents on the news in early trading at $10.56. Homestore.com
was up $2.19, trading at $31.12.

Homestore.com’s REALTOR.com site also gets exclusive 40-year access to the
listings of Cendant’s Century 21, Coldwell Banker and ERA real estate
franchises.

Homestore.com is making the acquisition in an all-stock transaction totaling
approximately 26.3 million shares; based on yesterday’s closing price of
$28.953 per share, the transaction is valued at approximately $761 million.

Homestore.com, which also operates HomeBuilder.com, SpringStreet.com and
HomeFair.com, said the transaction is currently under review by the antitrust
division of the Department of Justice.

“We’ve done our homework,” said Stuart Wolff, Homestore.com’s chairman and
chief executive in a conference call with analysts. He said the company is
confident the transaction will be approved.


The deal includes an agreement by Cendant to purchase Homestore.com’s
technology and Web-based marketing products and vertical ASP solutions.


In addition, Cendant will invest in Homestore.com’s development of the
Realtors Electronic Transaction Platform (eRealtor.com), the official real
estate transaction platform of the National Association of Realtors.


“With this transaction, we’re increasing choices for consumers nationwide
while continuing to put the real estate professional center stage,” Wolff
said. “This is a giant step forward.”


The transaction does not include National Home Connections or Metro Rent,
which will be retained by Cendant. Cendant gains a seat on the Homestore.com
board.


Although revenues have been climbing steadily and the company brought in $62
million in the third quarter, Homestore.com has yet to make any money, and in
fact it has lost $1.03 per share over the first three quarters of this year.


“Homestore.com has done an outstanding job establishing itself as the leading
Internet real estate destination, and we are very pleased to align our
expanding New Economy efforts with them,” said Cendant’s chairman, president
and chief executive officer, Henry R. Silverman.


Cendant said the deal is expected to enhance its off-line real estate
businesses and franchise systems.

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