Cendant Makes Bid for Avis
NEW YORK (AP) _ Cendant Corp. moved Tuesday to buy the portion of Avis Group Holdings it does not already own, in what would be its first major acquisition since it was hurt by an accounting scandal two years ago.
Cendant is seeking to purchase Avis for $29 a share, a deal that would be valued at $750 million. The New York-based company currently owns 18 percent of Avis’ outstanding common shares, as well as the Avis trademark and the auto rental company’s Wizard reservation and fleet management system.
An Avis spokesman confirmed Tuesday that the company had received the Cendant offer, but said it would have no comment until after its board met to discuss the proposal, perhaps as early as Tuesday.
″(The offer) was only received this morning and we’re trying to pull everyone together at this point,″ said Greg Faulhaber, the spokesman for Garden City, N.Y.-based Avis.
A Cendant spokesman said the company would not comment beyond the release announcing its proposal.
If completed, the deal would return Cendant to the position it held in 1996, when it purchased Avis in full. It sold off most of its interest the following year in a public stock offering.
Tuesday’s announcement by Cendant follows two years of difficulties tied to accounting regularities that led to the largest-ever settlement in shareholder class-action suit. As it struggled, Cendant worked to sell off many of its non-strategic assets.
The company has weathered the problems, and has recently returned to looking for acquisitions, said Henry A. Diamond, an analyst with CS First Boston. But until Tuesday’s announcement, Cendant appeared most interested in buying a lodging chain that would complement the Ramada brand name it already owns, Diamond said.
Instead, Cendant executives probably took a look at Avis’ financial and stock price and saw a bargain they couldn’t pass on, analysts said.
``It’s a very attractive business and it hasn’t been sensibly valued by the public markets and, clearly, that’s what Cendant is realizing,″ said David Riedel, an analyst with Salomon Smith Barney.
Avis shares were trading Tuesday at $29.938, up $4.438. Cendant was trading at $13.375, up 6.25 cents.
On the Net: