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Business Observer Friday, Jun. 14, 2019 1 year ago

Rental car giant connected to potential deal

A Wall Street analyst says a Hertz-Avis merger is a viable option.

While Estero-based car rental giant Hertz has had some good news of late, including an improved earnings report, doomsday scenarios for the major Southwest Florida employer are usually only a fender-bender away.

Among the earnings highlights, from the report released in early May: a 2% increase in revenues; net loss attributable to Hertz Global improved 27%; and adjusted EBITDA improved 93%. Then, in early June, Hertz took a big step, in announcing a monthly vehicle-subscription service called Hertz My Car — The Netflix of cars. The move, coming in two pricing levels and available in testing modes in Austin and Atlanta, comes a month after privately-held Enterprise announced a similar program.

Hertz Senior Vice President of Brand Jayesh Patel, in a statement, says Hertz My Car is in line with customer surveys and the changing needs of travelers and city residents in the age of Uber and Lyft. “At Hertz,” Patel says, in part, “we're here to get you there.”

But Hertz, according to a Wall Street analyst Hamzah Mazari, might be going in a different direction: a merger with longtime competitor, Avis.

Mazari, with global investment banking firm Macquarie, published a report June 10 that suggests a merger between the pair is now viable with the “emergence of Lyft and Uber.” Mazari’s report was revealed in a blog post on Seeking Alpha. Given that emergence, Mazari, according to the post, sees a Hertz-Avis deal clearing the Department of Justice “without a significant amount of anti-competition pushback.”






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