VW’s big takeover bid for Europcar – Not looking good – TopAuto
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VW’s big takeover bid for Europcar – Not looking good

Europcar Mobility Group has rejected a bid from Volkswagen AG valuing the auto-rental firm at about 2.2 billion euros ($2.6 billion), people with knowledge of the matter said.

A consortium led by the German carmaker offered about 44 euro cents per share for Europcar earlier this month, the people said, asking not to be identified because the information is private.

Europcar, which is controlled by a group of hedge funds, views the proposal as too low, the people said.

Investment firm Attestor Ltd. and Dutch transport conglomerate Pon Holdings BV are among the bidding group, the people said.

Europcar confirmed in a statement after Bloomberg’s report that it had rejected a 44 cents-per-share bid without saying who was behind the approach.

The offer would represent about a 12% premium to Europcar’s Tuesday closing price. The stock rose 9.5% on Wednesday, its biggest gain in six weeks.

VW is interested in gaining access to Europcar’s infrastructure and technology in a bet on the future of mobility services, the people said.

While demand for rental cars has recovered as governments loosen virus-related restrictions, companies in the space face long-term challenges from newer entrants offering ride-hailing and car-sharing.

The German carmaker isn’t currently planning to raise its offer, though that could still change, the people said.

Representatives for VW, Attestor and Pon declined to comment.

A representative for Europcar’s top shareholder Anchorage Capital Group declined to comment, while Marathon Asset Management, the second-largest investor, couldn’t immediately be reached.

Europcar shares have declined about 67% in the last year and hit an all-time low of 25 cents on Feb. 26, when the company announced it closed its financial restructuring, according to Bloomberg data.

The average 12-month target price among six equity analysts is 39 cents, according to data compiled by Bloomberg.

Earlier Consideration

VW considered making an offer for Europcar roughly a year ago, people familiar said at the time, but those deliberations didn’t lead to a transaction.

A takeover would help expand the carmaker’s mobility offerings, including rental and leasing programs for new and used electric cars, and give it access to additional sales channels for its emerging electric fleet, the people said at the time.

If VW did a deal this time around, it would mark a reversal after the company sold Europcar to buyout firm Eurazeo SE in 2006 for 1.26 billion euros.

Earlier this year, Europcar completed a debt restructuring and capital increase that wiped out more than 1 billion euros of debt and handed control of the company to creditors led by Anchorage and Marathon.

American rival Hertz Corp., which is emerging from Chapter 11 protection, has benefited from a rapid return of leisure travel in the U.S. as the Covid-19 pandemic subsides.

The business rebound sparked a fierce bidding war to buy the company out of bankruptcy, and Hertz and its rivals have struggled to maintain enough supply of cars for customers.



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