Avis Budget Takes Defensive Stance to Fend Off SRS

By Anna Breuer on 28 January 2020
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Avis Budget Group said Tuesday that its board of directors approved the adoption of a one-year shareholder rights plan.

The plan, the company said, is intended to “protect the best interests” of the company and its shareholders and to prevent SRS, the company’s largest shareholder, from obtaining “effective control” of Avis Budget without paying a control premium.

“Unfortunately, SRS has once again given us no choice but to adopt a rights plan to protect the interests of Avis Budget Group and its other shareholders,” said Leonard S. Coleman, the company’s board chairman.

SRS Investment Management, which holds a 31% economic interest in the company, has been Avis Budget Group’s largest stockholder for the past nine years.   In 2018, SRS launched a fight to shake up the car-rental company’s board of directors. Once month prior, Avis Budget implemented a poison pill to prevent SRS from exceeding 15% of voting stock. This move came after Avis and SRS failed to reach a new agreement to avoid a proxy fight.

Avis said at the time it was concerned that SRS would obtain “effective control” of the company without being forced to pay a premium.

(Photo: Accura Media Group)

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