(Threads Merged) Avis Budget Group buys Zipcar for $500m-WSJ
AVIS is getting into the hourly rental business.
Looks like Zipcar will be AVIS's way of directly competing with Hertz on Demand.
According to Reuters, the deal is for $500m in cash and AVIS expects the deal to close in Q1 of this year.
Last edited by UAPremExecflyer; Jan 2, 13 at 4:33 am..
Reason: Added cash and closing details
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Boy, that was quick. I mean ZipCar getting in and out. Would have thought they'd wait to grow value even more. As a city dweller who gave up my local car due to frequent air travel, I've used it a lot in Boston. Looking forward to using it in Seattle, where there are dozens, on next trip. I wonder if it will expand or contract the available hourly cars/locations. I generally sense it will be a good thing.
Enterprise is also getting into the hourly/neighborhood model. Only a couple of cities, so far. Their pricing undercuts ZipCar. Recently offered a Groupon joining deal. (I have no connection with Enterprise or Groupon except as customer.)
Lawsuits are being filed that allege that the price undervalues Zipcar. Not sure anyone knows how to properly value a car sharing service at this point.
Remember, Avis didn't actually buy ZipCar, the Avis Budget Group did.
So one possiblity is that whatever they do with it will only be available through Budget and not through Avis!
Don't confuse Avis Budget Group with Avis itself and think that anything that Avis Budget Group does will necessarily apply to Avis itself. It's an umbrella company, and it's just put one more thing under the umbrella. (Especially as long as they continue to operate Avis and Budget mostly separately, only consolidating certain things like check-in at smaller airports.)
(There are, for example, sometimes promos that a particular partner has with Budget with no matching promo for Avis, or vice versa, even though some other times the exact same promo is available for both Avis and Budget.)
Lawsuits are being filed that allege that the price undervalues Zipcar. Not sure anyone knows how to properly value a car sharing service at this point.
Lawsuits are always filled when a deal like this goes through. People just can't understand that majority shareholders hold the power. If the board votes for a sale then that is that. How does a 50% premium on the current price undervalue Zipcar? The brand is the only thing the company has. The entire business model without the existence of a larger rental car network like Avis is absolutely un sustainable in the long run especially with services like Getaround.com taking a bite out of the pie.
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Posts: 7,768
Email received from "info" yesterday
Quote:
big news from zipcar
Dear Firewind,
Zipcar is ringing in the year with a bang! We're thrilled to announce that we've entered into an agreement to be acquired by Avis Budget Group.
We'll skip the legal mumbo-jumbo and get right to the point, since we assume that what you really want to know is what this means for you.
Simply put, this is a major win for Zipsters around the world. With the global footprint, backing, and talented leadership of Avis, we're going to step on the gas. We believe that you'll see more Zipcars in more locations (especially during times of peak demand!); that you'll see new service offerings that make Zipcar more flexible and fun for you; and that you'll continue to experience the most advanced and sophisticated technology to keep you zipping along your merry way.
Some things won't change at all -- from the Zipcar team in your local office to the great brand, to our relentless enthusiasm for making the user experience the best it can be.
You can read more about the news in the press release but we wanted to tell you personally (ok, it's an email, but close enough) and let you know how excited we are to make a good thing even better!
CEO skips the "legal mumbo-jumbo" in his missive to the unwashed masses. Bet he won't skip the "legal mumbo-jumbo" when negotiating his golden parachute.
Programs: UA 2MM, DL 500k, CC Gold, HH Gold, Miracle Fruit-su Club, GP 1M
Posts: 7,768
Right now being discussed on Boston NPR station WBUR's "Radio Boston" talk show. For those accessing it on the web later, it starts at the show's :20 point. They gave it 21 minutes.
They have the founder, Robin Chase, on the panel. Though she's already completely out of it, she's all for the sale.
I pondered @3 above about why they sold now, instead of waiting for the value to go up. Someone just said that it was actually valued at a billion a year ago.
The value wasn't going up, it was going down. Zipcar never made money, as it appears that their cars mainly sat idle during the week at expensive inner city garages, waiting for zipsters to use them on the weekends.
Quote:
Originally Posted by Firewind
Right now being discussed on Boston NPR station WBUR's "Radio Boston" talk show. For those accessing it on the web later, it starts at the show's :20 point. They gave it 21 minutes.
They have the founder, Robin Chase, on the panel. Though she's already completely out of it, she's all for the sale.
I pondered @3 above about why they sold now, instead of waiting for the value to go up. Someone just said that it was actually valued at a billion a year ago.
