Cendant to Buy National Parking, American Bankers Insurance Group

Cendant Corp. agreed to buy National Parking Corp. of Britain for $1.34 billion in cash to expand into the field of auto services.

It also reached agreement, as expected, to buy American Bankers Insurance Group Inc. for $3.1 billion, or $67 a share, in stock and cash, in a deal that would make it one of the leading direct marketers of insurance.

The purchase plans are the latest by Cendant’s leaders, Henry Silverman and Walter Forbes, who are trying to build a company that sells shopping, travel, auto, dining and other services to almost 70 million paying members. It also franchises brands such as Avis car rentals, Howard Johnson hotels and Coldwell Banker real estate.

“They’re generating such a significant amount of capital, they’re looking for opportunities to invest it,” said Rob Nicoski, an analyst at Minneapolis-based Piper Jaffray Inc., who has a “strong buy” rating on the company.

“It’s a great business model,” Nicoski added, alluding to Cendant’s emphasis on collecting fees from franchises and memberships.

Miami-based American Bankers sells credit insurance, which covers credit card and other debt payments when a borrower dies or becomes unemployed or disabled. Its sales through banks, retailers and other businesses made it the largest third-party direct marketer of insurance in the U.S.

Cendant’s plans to acquire the company reflect the view of Forbes and Silverman that their marketing network will increase American Bankers’ sales.

Cendant, headquartered in Stamford, Conn., and Parsippany, N.J., was so eager to buy American Bankers that it topped rival bids from American International Group Inc., the largest U.S. financial services company.

American Bankers in December agreed to sell itself to AIG for $2.2 billion, or $47 a share. The next month, Cendant announced a $58-a-share tender offer for American Bankers, boosting the price to $2.7 billion. AIG matched that bid before Cendant, on March 16, retaliated with a $67-a-share offer.

AIG would receive a $110-million breakup fee under the agreement announced Monday.

“We determined that it would not have been in AIG’s best interests to raise our proposal above $58 per share,” AIG Chairman Maurice Greenberg said in a statement.

National Parking operates NCP parking garages and Green Flag emergency car services in Britain.

The company, whose 500 parking lots are used by 6.5 million customers in Britain and elsewhere, will help Cendant build an international business and “complement” its franchising and direct-marketing capabilities, Forbes, Cendant’s chairman, said in a joint statement with CEO Silverman.

Cendant, which also operates corporate fuel card services, said it hopes to sell its products to National Parking customers. National Parking will help Cendant’s commercial auto fleet management subsidiary, which has 275,000 vehicles in Britain. It has issued 1 million fuel cards there, which companies use to track auto spending. The cards are accepted at 12,000 gas stations.

The transaction would be expected to add to Cendant’s earnings per share immediately, according to the statement the company released in the U.S. Cendant would assume $100 million of National Parking’s debt, he said.

On the New York Stock Exchange, American Bankers fell 13 cents to close at $64.44, Cendant fell 88 cents to close at $39.13, and AIG declined $2.06 to close at $127.31.