Avis Budget Group, Inc. confirmed yesterday it had received notice from SRS Investment Management (“SRS”), which currently has two representatives on the Avis Budget Group Board of Directors, of SRS’s intention to nominate five candidates for election to the Board at the 2018 Annual Meeting.
The following is Avis Budget Group’s statement in full:
Leonard S. Coleman, lead independent director of Avis Budget Group, said: “We have had an ongoing dialogue and a cooperative relationship with SRS over the last two years and welcome the constructive input of all of our stockholders. As SRS knows firsthand through its existing Board representation, the Avis Budget Group Board is highly focused on maximizing stockholder value and has provided effective oversight of the management team as it has successfully led the Company through multiple market cycles and positioned it well for the future. Given SRS’s support of the Company’s leadership team and strategic plans, as well as its knowledge of the upcoming Board refreshment, we are disappointed that we will be engaged in a costly and distracting proxy fight.”
As previously announced, the Board instituted a short-term Stockholder Rights Plan in January to protect unaffiliated stockholders from any efforts by SRS to obtain effective control of Avis Budget Group without paying a control premium or to block a transaction the Board believes is in stockholder interests. As reflected in the terms of the Stockholder Rights Plan, the Board has been and remains open to any and all value maximizing alternatives, and is committed to ensuring that no one stockholder be in a position to prevent any such outcome.
Mr. Coleman concluded: “Avis Budget Group’s highly qualified Board has an appropriate mix of skills and experiences, in-depth company knowledge, relevant expertise across a wide range of industries, and extensive management experience. Our ongoing Board refreshment process, through which we are identifying director candidates with additive expertise in technology and innovation to replace some retiring directors, will ensure that our Board remains best in class.”
Avis Budget Group’s Board and management have delivered superior results for stockholders and continue to execute on the Company’s winning strategy to drive sustained, profitable growth.
With the Board’s oversight, Avis Budget Group has:
• Consistently outperformed its closest public company peer and the broader market over the last five years
• Created a global leader in the rapidly changing vehicle rental and mobility solutions industry through strategic M&A, organic investment and talent acquisition
• Returned over $1.3 billion to stockholders since 2012 by buying back 30% of the Company’s outstanding shares, representing over 40% of free cash flow
• Taken decisive action by instituting a plan to offset nearly $300 million of unexpected industry pricing and fleet cost headwinds through aggressive cost-cutting initiatives and fleet management optimization
• Positioned its business for the future by investing in its technology capabilities, including industry-leading mobile applications, enhanced customer experiences, an increasingly connected fleet, telematics, fleet management and pricing analytics, and on-board diagnostics.
The Corporate Governance Committee will review SRS’s notice of nomination for compliance with the Company’s by-laws, evaluate SRS’s nominees and make a recommendation to stockholders that it believes is in their best interests. Avis Budget Group stockholders are not required to take any action at this time.
The Board will present its recommendation regarding director nominees in Avis Budget Group's definitive proxy statement and other materials, to be filed with the Securities and Exchange Commission and made available to all stockholders eligible to vote at the 2018 Annual Meeting.
Morgan Stanley & Co. LLC is acting as financial advisor to Avis Budget Group, and Kirkland & Ellis LLP is providing legal counsel.
The project will create 3,000 new jobs and more than $75 million in capital investment.