Avis Inc in $1bn float

Avis Incorporated, the US car rental business, is preparing to join sister company Avis Europe and arch rival Hertz with a stock market listing which will value it at around $1bn.

HFS, the US hotel to property group which owns Avis Inc, is understood to be preparing to accelerate plans to float off the business in order to capitalise on new investor interest in the car rental sector.

On Friday Ford said it would float a 20 per cent stake in its Hertz car rental business to raise around $600m. Later this month Avis Europe returns to the London market with a listing which will value the company at around pounds 700m.

The flotations are part of a dramatic restructuring of the car rental industry, which has seen several companies change hands and a steady weakening of the motor manufacturers' ties with the industry.

In January Ford sold Budget Rent-A-Car to its largest franchisee, Team Rental. Waye Huizenga's Republic Industries has recently bought both Alamo and National Car Rentals.

National Car Rentals was part owned by General Motors. GM is selling its stake in Avis Europe as part of that company's flotation. GM sold its 25 per cent stake in Avis Inc, when HFS acquired the US car rental business last October for $800m. Meanwhile, Chrysler is looking to sell its Thrifty Car Rental business.

The big motor manufacturers have used their relationships with car rental companies as a means of securing high-volume customers. Around two-thirds of the cars Hertz buys in the US are made by Ford. Avis has been a key customer for GM.

However, although GM is severing its investment connection with Avis Europe, the two companies have signed a five-year sales agreement which will maintain the relationship.

Industry experts believe the GM approach will ultimately be used by Ford, which will dispose of its remaining 80 per cent stake in Hertz while retaining a solid commercial relationship.

"The 20 per cent sale is Ford putting a toe in the water," one expert said. "I believe their ambition is to sell out completely."

A Ford spokesman said it was premature to speculate on a further sale of shares beyond the offer announced on Friday.

Analysts point to Ford's determination to crystallise value for shareholders and its steady return to the core business.

The decoupling of car rental companies from car manufacturers is seen as good news for the rental industry. While manufacturers have seen rental firms as outlets, this has reduced the incentive to increase rental charges. Independent car rental companies will be more inclined to try and increase rental charges.

Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits