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 cable programming to Cendant's hotels. In addition, Cendant, whose stock has been in a freefall lately, owns travel, mortgage and membership businesses. Its real estate holdings include Coldwell Banker and CompleteHome.com, a real estate Internet site.

Liberty, currently part of AT&T Corp., is headed by John Malone. Many Wall Street analysts believe AT&T's recent announcement to restructure has been caused by Malone's public criticisms of AT&T. AT&T plans to spin off Liberty in second quarter 2001 - if the IRS says rules it is a tax-free event.

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