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Homestore.com expands again
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October 27, 2000: 10:40 a.m. ET
Online real estate site pays $761M for Cendant's move.com portal
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NEW YORK (CNNfn) - Homestore.com extended its dominance over the online real estate listing market Friday, agreeing to acquire move.com, the Internet real estate portal owned by Cendant Corp., for approximately $761 million in stock.
The merger combines two of the largest destinations for home and real estate information on the Web and strengthen Homestore.com's already dominant position as the leading U.S. portal for home buyers and brokers.
The agreement also includes an 40-year agreement giving the Thousand Oaks, Calif.-based Homestore.com exclusive access to Cendant's Century 21, Coldwell Banker and ERA national real estate listings, and for Cendant to purchase Homestore.com's technology and Web-based marketing products.
"The bottom line is we actually believe that this will accelerate our ability to provide services to consumers and, on the professional side, accelerate our product development," said Stuart Wolff, Homestore.com's chairman and chief executive, in an interview with CNNfn.com.
Terms of the agreement call for Homestore.com (HOMS: Research, Estimates) to exchange approximately 26.3 million share of its common stock for move.com. Based on its closing price of $28.953 Thursday, that values the Internet property at roughly $761 million.
 The transaction terms will leave Cendant (CD: Research, Estimates) -- a diversified holding company that owns such brands as Century 21 real estate agencies, Ramada hotels and Jackson Hewitt accounting services -- with an approximately 14.5 percent stake in Homestore.com, ranking it among the company's top shareholders.
The acquisition will be subject to normal regulatory review procedures, but is also expected to get close scrutiny from the U.S. Department of Justice, which has expressed concern in the past about Homestore.com's dominance over the online real estate business.
The company already controls about 90 percent of online real estate listings and was recently asked by the antitrust department to provide more information on its operations. But Wolff said the request was a typical one made to several leading Internet portals and he expressed confidence that the merger with move.com would experience no complications.
"We're optimistic, or else we wouldn't be doing it," he said. "We don't think we are being singled out" by the Department of Justice.
Homestore.com officials hope to complete the transaction within the next six months. The company said assuming it closes within that time frame, the deal would add to both its earnings and cash flow by the end of next year.
Homestore.com shares rose $1.56 to $30.50 in mid-morning trading Friday, while Cendant gained 38 cents to $10.31. 
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