Cendant, among other things, franchises a number of hotels,including Days Inn, Howard Johnson, Ramada Inn and Travelodge.Liberty could provide its high-speed Internet access and cableprogramming to Cendant's hotels. In addition, Cendant, whose stockhas been in a freefall lately, owns travel, mortgage and membershipbusinesses. Its real estate holdings include Coldwell Banker andCompleteHome.com, a real estate Internet site.

Liberty, currently part of AT&T Corp., is headed by JohnMalone. Many Wall Street analysts believe AT&T's recentannouncement to restructure has been caused by Malone's publiccriticisms of AT&T. AT&T plans to spin off Liberty insecond quarter 2001 - if the IRS says rules it is a tax-freeevent.

Late last year, Liberty had invested $400 million in Cendant. Inthe latest deal, Liberty has bought 19.8 million Cendant sharesfrom Lehman Brothers Inc. for $10.44 per share for a grand total of$206 million. Liberty also has bought 4.1 million shares fromCendant for $12.34 each or $50 million total. In addition, Libertyhas swapped 29 million warrants for about 2.3 million common sharesof Cendant. Stock has dropped nearly 65% since Liberty has startedinvesting in Cendant.