Bid talk drives Avis higher

Troubled car rental firm Avis Europe today became the latest FTSE 250 Index stock to find itself at the centre of takeover speculation.

Avis shares closed more than 10% higher – up 5.5p at 58.5p – after rumours of a possible bid hit the market.

Analysts named US corporation Cendant as the most likely takeover candidate, particularly as it owns the global rights to the Avis and Budget brands. It recently bought online travel company ebookers for £209m (€304.3m).

Avis Europe, which operates the Avis and Budget brands and systems in Europe, Africa and the Middle East, is vulnerable to a bid after a grim couple of years.

As well as the recent economic downturn, the growing trend for travellers to hire cars over the internet has affected the company. It said it expected tough trading conditions to continue into 2005.

Further details on the group’s future should emerge on February 27, when chief executive Murray Hennessy will announce details of a business review.

A bid for Avis Europe would require the backing of Brussels-based car distributor D’Ieteren, which owns 60% of the company.