Budget Rent A Car Going Private in Deal Financed by Ford
CHICAGO (AP) _ Budget Rent A Car Corp. will be acquired for $333 million by an investment group led by Gibbons, Green van Amerongen Ltd. and Budget’s management in a deal financed primarily by the Ford Motor Co., officials said today.
Budget, the nation’s third-largest rental car company and the only one still publicly held, said Beech Holdings Corp. would pay $30 a share for the Chicago-based company’s 11.1 million outstanding shares.
Budget closed Friday at $17.12 1/2 in over-the-counter trading.
The deal was struck Sunday in New York, said Budget spokeswoman Jody Wilson.
This will be the second time in two years that Budget has been taken private by Gibbons, Green and Budget’s management.
Gibbons Green, an investment banking firm, is the general partner of the investment company that owns Beech Holdings. The agreement calls for Budget’s management to purchase voting shares of Beech Holdings and continue to operate Budget.
Ford’s financing will be through a purchase of non-voting shares of Beech Holdings, Budget said in a statement. Budget did not reveal the amount of Ford’s investment.
As part of the deal, Budget and Ford signed a long-term agreement to maintain their existing supply relationship, Budget said.
Budget is the nation’s third-largest car-rental agency, behind No. 1 Hertz and second-ranked Avis. Ford already has a stake in Hertz.
Budget went public in May 1987 at $14 a share. It was previously held by Transamerica Corp., which sold Budget in 1986 in a leveraged buyout to Gibbons, Green and Budget’s senior management.
Budget reported its third-quarter earnings rose 57 percent to a $8.8 million, compared with $5.6 million in the third quarter of 1987.
Its third-quarter revenue was $152.1 million, 32 percent higher than the $115.6 million recorded for the same period of 1987, Ms. Wilson said.