Avis Budget has agreed terms to purchase Avis Europe, reuniting the two brands for the first time in 25-years. Under the terms of the transaction, Avis Europe shareholders will receive 315 pence per share, valuing the company at approximately £636 million.
Avis Europe had recorded an increase in full-year profits, as the international car rental market continues to rebound. Underlying pre-tax profit stood at €51 million for the year ended December 31st, compared with €35.2 million the previous last year.
Avis Europe reported a strong increase in overall rental income in an interim management statement. In the four months to the end of October, the UK-based group saw rental income increase by 4.5 per cent, with trading “continuing to improve in line with our expectations”.
Dollar Thrifty has raised its full-year 2010 adjusted earnings expectations, with falling costs cited as a key factor. The car rental giant is presently at the centre of a takeover battle between rivals Hertz and Avis, with the former recently questioning the competition implications of a Dollar deal with the latter.
Shares in Avis Europe have fallen sharply after the car giant announced that it is to carry out a £151m rights issue in a bid to bolster its balance sheet.
Car hire giant Avis is set to offer UK customers electric vehicles from 2011, following a partnership deal with the Renault-Nissan Alliance. The deal follows an earlier announcement from rival Hertz.
Avis Europe has said its prices by 10 percent as it announced further restructuring that will include job cuts and a freeze on salaries and recruitment.Pascal Bazin, chief executive, warned of tough times ahead and that prices would rise in April. “This is the first time prices have risen for the past six to seven years,” he said.