Avis Budget Group amends agreement with SRS Investment Management

Avis Budget Group, Inc. (NASDAQ:CAR), the $5.6 billion car rental giant whose stock has surged 110% over the past six months, announced Monday that it entered into a second amendment to its Fourth Amended and Restated Cooperation Agreement with SRS Investment Management, LLC and certain affiliates on September 5. According to InvestingPro data, the company’s stock currently trades at $158.58, near its Fair Value.

According to a press release statement, the amendment increases the cap on voting securities that SRS may beneficially own from 35% to 45%. Any voting securities held by SRS above this threshold must be voted in proportion to votes cast by other shareholders. This development comes as InvestingPro analysis shows the company maintaining a FAIR overall financial health score, with particularly strong price momentum metrics.

The amendment also sets the size of Avis Budget Group’s board of directors at five or six members, as long as SRS continues to hold at least 10% of the company’s voting securities. If a director not affiliated with SRS leaves the board, the company is required to appoint a replacement unaffiliated with SRS promptly.

Under the revised agreement, no more than two directors affiliated with SRS can serve on the board. If SRS transfers voting securities to another holder with 10% or more of the voting securities, the board size cap is removed, but no more than one-third of the board, or two directors—whichever is greater—may be affiliated with SRS and/or a 10% holder.

The amendment further stipulates that SRS, or any subsequent 10% transferee, may not transfer shares to anyone who would hold 10% or more of the company’s voting securities unless the recipient agrees in writing to be treated as an “interested stockholder” under Delaware law for five years and to vote in favor of maintaining the board composition provisions for the same period. These obligations also extend to the transferee’s successors and assigns.

This information is based on a press release statement included in a recent SEC filing. For investors seeking deeper insights into Avis Budget Group’s governance structure and financial performance, InvestingPro offers comprehensive research reports with detailed analysis of 1,400+ top stocks, including CAR, transforming complex Wall Street data into actionable intelligence.

In other recent news, Avis Budget Group reported second-quarter earnings per share of $0.10, which fell short of analyst estimates of $2.21, although the company’s revenue of $3.04 billion slightly surpassed the expected $2.99 billion. In a strategic move, Avis Budget Group has partnered with Waymo to introduce a fully autonomous ride-hailing service in Dallas, with plans for a public launch in 2026. This partnership will see Avis providing fleet operations support, including infrastructure and maintenance, while Waymo will handle the self-driving technology and offer the service through its app.

Additionally, Deutsche Bank raised its price target for Avis Budget Group to $196 from $130, maintaining a Buy rating on the stock. The firm noted the significant rise in car rental stocks over recent months as a factor in their decision. In other corporate news, Resources Connection, Inc. announced the appointment of Jeffrey H. Fox and Filip Gydé to its Board of Directors, as part of a planned board refreshment process. These developments highlight the ongoing changes and strategic initiatives within these companies.

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