Avis Budget Group Adopts Short-Term Shareholder Rights Plan to Protect the Company and its Shareholders

SRS Investment Management Refuses to Renew Cooperation Agreement on Acceptable Terms

PARSIPPANY, N.J., Jan. 28, 2020 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) today announced that a committee (the “Committee”) of its Board of Directors that was formed to manage the Board’s engagement with SRS Investment Management (“SRS”) has unanimously approved the adoption of a one-year shareholder rights plan to protect the best interests of Avis Budget Group and all of its shareholders.

The rights plan is intended to prevent SRS, the Company’s largest shareholder, from obtaining effective control of Avis Budget Group without paying a control premium. The rights plan is designed to ensure that all Avis Budget Group shareholders have a fair opportunity to vote on the future of the Company at the upcoming 2020 Annual Meeting of shareholders.

SRS has disclosed a 33.8% economic interest in Avis Budget Group, including ownership over 21.9% of the outstanding shares and economic exposure to an additional 11.9% of the outstanding shares through derivative instruments. The standstill provisions under the Company’s 2018 cooperation agreement with SRS expire on January 28, 2020. The Committee in recent months has made numerous good-faith attempts to reach a new agreement with SRS, but SRS has been unwilling to agree to terms acceptable to the Committee.

In light of SRS’s unwillingness to enter into a new cooperation agreement on terms acceptable to the Committee and its current ownership level and Board representation, the Committee determined that the adoption of a tailored, short-term rights plan is necessary to protect Avis Budget Group and its other shareholders. If SRS agrees to enter into a new cooperation agreement on mutually acceptable terms, the Committee will authorize the immediate termination of the rights plan.

"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, Chairman of the Committee and the Avis Budget Group Board. “As our history of engagement with SRS demonstrates, we are willing to work with SRS and remain open to entering into an agreement with SRS that protects the Company and all of its other shareholders, and we hope to continue this important dialogue with our largest shareholder. As part of that dialogue, I and selected other Directors have made clear to SRS that we are willing to step down from the Board as part of an agreement that serves the interests of all Avis Budget Group shareholders."