June 30 (Bloomberg) -- Cendant Corp., the travel-services company that never fully recovered from an accounting scandal nine years ago, agreed to sell the division that includes its Orbitz Web site to the Blackstone Group for $4.3 billion.

Cendant's shares had their biggest gain in two months after the travel provider made progress on its plan to break itself into four separate companies. Proceeds from the sale of Cendant's Travelport will be used to cut debt at the Realogy Corp. and Wyndham Worldwide Corp. divisions, the New York-based company said today in a statement.

Chief Executive Officer Henry Silverman, 65, built Cendant through acquisitions including Avis and the Days Inn hotel chain and will head one of the spin offs, the Realogy real-estate company, through Jan. 1, 2008. With the sale of the Travelport unit, the company now expects to issue shares of Realogy and hotel-operator Wyndham to stockholders in late July.

``This is a positive for Cendant because this unit has been responsible for much of the earnings shortfalls and lowering of estimates recently,'' said Thomas McIntyre, who oversees $115 million including 427,576 Cendant shares at McIntyre, Freedman & Flynn in Orleans, Massachusetts. The sale ``is getting done for the price range that people had believed it would get done, which is good news.''

Cendant's shares jumped 52 cents, or 3.3 percent, to $16.29 at 4 p.m. in New York Stock Exchange composite trading, for the ninth biggest gain in the Standard & Poor's 500 Index. They have fallen 5.6 percent this year.

Cutting Debt

Following the Travelport sale, debt at Realogy will be cut to $750 million and reduced to $600 million at Wyndham, the company said.

At the time of the spinoffs, Silverman will be paid $21.7 million under a separation agreement with Cendant, the company said in a regulatory filing. He will also receive a pro rata bonus for 2006 of about $6.6 million. Richard Smith, head of Cendant's real-estate services division, will become CEO of Realogy when Silverman leaves at the end of 2007.

The company plans to keep the Avis and Budget car-rental divisions and rename the unit that remains as Avis Budget Group Inc.

``With Blackstone in a private setting, you have the ability to take on additional leverage,'' Travelport CEO Jeff Clarke said in an interview. ``Travelport, because of its strong and consistent cash flows, its strong position in the market place, played very well to interest in the private equity community.'' He said he plans to remain with Travelport.

Merger With CUC

Cendant was created through the December 1997 merger of CUC International Inc. and HFS Inc. Accounting irregularities at CUC that took place before the transaction were revealed in 1998. The company has lost about half its market value since then.

The Travelport deal is expected to close in August following regulatory approvals, the company said.

Blackstone, the New York-based private-equity firm, has raised more than $50 billion for buyouts, hedge-fund investments, debt and loan funds, and real estate since it was founded in 1985.

In March, the firm agreed to buy Center Parcs UK Group Plc for 205.4 million pounds ($357 million) to add the British operator of vacation resorts to a stable of European theme parks. In February, Blackstone agreed to acquire MeriStar Hospitality Corp for $2.6 billion, adding hotels such as Doral Desert Princess Resort in Palm Springs, California, and the Hilton Washington Embassy Row.

Hospitality Franchise Systems

Silverman was CEO of Hospitality Franchise Systems Inc., which later merged with CUC, when Blackstone owned the company. It controlled the Days Inn, Ramada and Howard Johnson hotel brands. Blackstone later spun off the unit.

Travelport has struggled as more airlines and hotels offer bookings on their own Web sites. In December, the company ousted the head of the division because of slowing overseas growth.

Weakness at Travelport weighed on profit, Cendant said in February. It reported a 79 percent drop in 2005 earnings before interest, taxes, depreciation and amortization, even as revenue gained 35 percent.

The unit had sales of $2.43 billion last year, generating 13 percent of total company revenue. The division has about 8,000 employees.

The Realogy division includes NRT Inc., a real-estate brokerage franchisor with brands such as Century 21 and Coldwell Banker. It also offers relocation and title services. Wyndham includes the Ramada, Super 8 and Travelodge hotel brands as well as a vacation rental-property business.

Bond Repurchase

Buyout firms have announced $213 billion worth of takeovers so far this year compared with $124 billion through the same period last year, according to data compiled by Bloomberg.

The Travelport sale comes after Cendant bondholders earlier this week approved the repurchase of $2.6 billion in debt to allow the company to break up. The company needed bondholders to waive conditions of their debt agreements to move ahead with the spinoffs.

Cendant's 7.375 percent notes maturing in January 2013 rose .25 cents to 109 cents on the dollar yesterday, according to Trace, the bond price reporting system of the NASD. The yield fell to 5.70 percent.

Cendant was advised by Citigroup Inc., JPMorgan Chase & Co. and Evercore Partners Inc. and by the law firm of Skadden, Arps, Slate, Meagher & Flom LLP. Lehman Brothers Holdings Inc. and Credit Suisse Group advised Blackstone.

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net

Last Updated: June 30, 2006 17:58 EDT