Avis Europe Share Discussion Threads

[gerry321] 29/6/2005 17:24

Iulia

Agree with your comments.....

...........Heres a thought
which has just dawned on me now that I have sold enough of my pep/isa holdings to fund the rights issue and leave me on break even at around 61p
I can now place Sell orders for the balance of my holding at a slightly higher price say 64p/65p with no sweat on whether it is lifted or not.....
I wonder how many people are in a similar position ? ? If there are enough of them around methinks the share price will rise further by close of play on Friday since sellers will dry up

[iulia] 29/6/2005 16:32

I have checked the chart for D'Ieteren, the parent company, have look at the following link



If AVE would be in such a terrible mess as some people on this BB are suggesting, then the price of DIE would also be affected, but since the announcement of the rights issue their price has actually gone up, so either the bears on this BB are right and the rest of the market is wrong, or it's the other way round.

Time will tell.

[iulia] 29/6/2005 16:18

Gerry,

Sorry for being pedantic, but it's D'Ieteren, with capital "i"

[gerry321] 29/6/2005 15:26

Chirpy
You seem to have forgotten that Avis is a world brand and the business is 60% owned by a very profitable co D`Leteren who have just announced record results despite having Avis in their portfolio.....They can`t be all that bad at mgt themselves
Also although their initial hands off policy with Avis has proved to be a disaster this changed when they appointed a Board representative to ave in Dec04
There are only two possible scenarios for Avis
1 It is turned round to D`Leteren`s satisfaction by the current ( and relatively recently hired ) Mgt and is then retained or sold by D`Leteren
2 It is not turned round and is sold back to Cendant the brand owners at a loss
by D`Leteren......Since D`Leteren paid around 110p per share this would probably not be any lower than around 80p per share
Given that Fidelity, Templeton, Deutche Bank and D`Leteren own 80% of Avis and other Institutions own a further 12 to 15 % the share price at any point in time is totally dependent on the attitude of big investors
These guys can`t sell out easily without a massive loss as they bought in at sps ranging from 65p to 90p
So the share price can only go down if the big boys sell and go up if rumours of a bid emerge
The little man might bid up the price temporarily if trading improves but the stock shortage will continue post the rights issue unless the existing big investors unload some of their holdings

[chirpy chappy] 29/6/2005 13:09

Handycam...

My thoughts exactly, they need this money to help them keep going, its going to take a long time for things to come right, thats if they ever do, getting the money is one thing but putting it to good use is another,

People are probably not quite sure which way this share is going hence its hovering round this price for a while now but my past experience tells me it will continue its downwards trend in the very near future,

[shirishg] 27/6/2005 16:01

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[iulia] 27/6/2005 16:00

m4m,

many thanks for the new thread but even more so for clarifying the reason for the previous thread, I struggled to see the link between AVE and most of the stuff that was going on there.

[handycam] 24/6/2005 19:41

Who else believes that this is a rescue rights issue (but not described as such)?

A red market might see the nil paids tank.

[gerry321] 24/6/2005 19:29

Interesting to read posts by you guys who are so knowledgeable about the market
all I can add is a reasonable second guess at the motives behind Boardroom decisions and postulate the share price impact
Not that I could make a living out of this......

[iulia] 24/6/2005 14:29

gerry,

are you the m4m who started this thread?

[gerry321] 23/6/2005 20:14

If anybody needed confirmation that D`Ieteren will dispose of Avis back to Cendant irrespective of a turnaround performance by end Dec 2005 then it is contained in their press release yesterday in which they make clear that they are putting no more of their own money into Avis Europe
ie
AVE need around £110M in working capital
Lets have a rights issues says 60 % owner D`Ieteren
We`ll underwtite our share of approx 100M euros
And now we find that this 100M euros will come from new debt
The only issue for the rest of the shareholders is
Will Cendant pay more than the going rate for ave and what will the price be
PRESS RELEASE
22 June 2005
Public offering of a EUR 100 million bond
D'Ieteren s.a. has announced that it will be offering for public subscription in
Belgium, through its subsidiary D'Ieteren Trading b.v., a ten-year bond of EUR
100 million at 4.25% nominal gross rate from 24 June 2005. This bond issue
will enable D'Ieteren to diversify its financial resources and will be used for the
company's general needs.
The subscription period extends until 25 July 2005, unless closed earlier.
D'Ieteren has appointed Fortis Bank and KBC Bank as the lead managers for
this loan. The bonds will be issued in bearer form and will be listed on
Euronext Brussels. The issuer D'Ieteren Trading b.v., the guarantor D'Ieteren
s.a. and any of its subsidiaries, may call in the bonds and any outstanding
coupons and redeem them privately or on the exchange market at any time.
The prospectus for the bond offering will be available as at 24 June on our
website ww.dieteren.com or in the branches and websites of the abovementioned
banks.
________________
The D'Ieteren Group
D'Ieteren is an international group, active in three sectors of services to the motorist :
- automobile distribution in Belgium of the makes Volkswagen, Audi, Seat, Skoda,
Bentley, Lamborghini, Porsche, Yamaha and MBK;
- short-term car rental in Europe, Africa, the Middle East and Asia through Avis
Europe plc and the Avis and Budget brands;
- vehicle glass repair and replacement in Europe, Canada, the United States, Brazil,
Australia and New-Zealand through Belron s.a. and notably its CARGLASS® and
AUTOGLASS® brands.
D'Ieteren and its activities are present in 115 countries on 5 continents and serve over
13 million customers every year.
Founded in 1805, D'Ieteren celebrates this year its two hundred years of existence.
For more information, please refer to our website:
Contact
Jean-Pierre Bizet, CEO
Benoit Ghiot, Group Financial Manager
Catherine Vandepopeliere, Financial Communication
Tel : + 32 (0)2 536.54.39
e-mail : [e-mail]
End of press release.

[gerry321] 23/6/2005 14:21

By my calculations..

Free Market Volume of small men in ave is 18M to 24M max ..ie holdings below 200,000 averaging 10000 to 15000 shares
No free market Small Men is around 2000
And
approx 2.3M volume from 20 June to lunchtime 23 June in deals below 200,000
across 190 trades in which around 70 % of small men have sold
ie Only 5-7% of small men have sold ave which will include those selling to fund rights issue within ISAS/PEPS
And
Brokers seem unwilling to hold a buy or sell price above 15000 shares without a quote
Suggesting
1 No sign of panic among the little men
2 Those desperate to sell have now done so
3 Small buyers starting to come into the market
4 Brokers may have little stock at the minute and hence may have passed private deals between Institutions thru their books rather than accumulate on their books
Suggesting
Either
Equilibrium has been reached in the free market at around share price of 60p ahead of rights issue and this will be the closing price on 1 July
Or
The share price is now more likely to rise than to fall since the sellers may have dried up and the buyers will come from "new " shareholders wishing to get in before the rights issue

Shorters take note

[insipiens] 22/6/2005 16:37

You short of this one too Ash?

[shirishg] 22/6/2005 16:03

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[shirishg] 22/6/2005 16:03

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[mr ashley james] 22/6/2005 16:02

Informer are you still short?

[mr ashley james] 22/6/2005 15:22

Gerry the problem with AVE is it is a hostage to the Oil Price IMO.

[mr ashley james] 22/6/2005 14:49

Obviously now 60p!

[shirishg] 22/6/2005 14:32

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[gerry321] 22/6/2005 14:31

Bears Beware

Still early days till 1 July
but so far it looks like Institutions are not going to dump shares on the free market and that small man buyers are beginning to emerge at 60p
suggesting perhaps that the share price is on the rise ??

[gerry321] 20/6/2005 20:27

Iulia
Agree with comments re value of a global brand..........Look at the brand extensions Branson got from Virgin
With the brand owner being Cendant not Avis Europe the global driver for any brand extensions would most likely be Cendant with ave being a junior partner
More likely I think is disposal of the business
The 16 June declaration by D`Ieteren that they will not sell any shares before 30 Dec 05 is interesting
This date is about the point in the ave recovery plan where some tangible signs of progress ought to be showing on key performance indicators albeit not on the bottom line yet but sufficient to enable credible projections to be made about a P&L turnaround in 2006 and warrant a healthy jump in the sp
If this doesnt happen then D`Ieteren would be irresponsible to their other shareholders in not having a fallback plan to dispose of ave almost certainly back to Cendant

[gerry321] 20/6/2005 19:01

Follow up to post 1 above

Mon 20 June

Free market volume ie deals 20000 and below = 191000
Free Market Trades Buys = 9
Sell = 26
Large Trade volume ex Institutions Sell = 250000
no Large Trades Buy = 0
Sell = 1
From which we could speculate that
LITTLE MEN
If the average holding of the free market little man owning under 20000 shares is say 10000 shares
The No of free market little men ranges from
18M/10000 to 24M/10000
ie 1800 to 2400
Of which 35 traded today
Of which 75% were selling
If this pattern continues more or less with no further "news" to influence opinion
This suggests that well under 10% of little men are sufficiently worried about ave to try to get out at the current price Indeed a proportion of all little man sales which do take place will be to ensure they have funding within their pep /isa in order to to buy the rights issue
And
because of the cash call to fund the rights issue
... It is less likely that a significant number of current ave little men will want to increase their holding sufficient to influence the share price markedly
Any serious share price movement would probably come from new little men ..buying in for the longer term
Ironically given the shortage in numbers of ave "little men" it wouldn`t take a lot of newcomers for the share price to race ahead despite a relatively enormous Institutional seller overhang

INSTITUTIONS
However it is very unlikely that all the existing and new little man would have an impact equivalent to a doubling of their existing stake
Even if 50% of the little men increased their stake by 100% this would only be equivalent to 25% of the free market of 18M to 24M ie 4.5M to 6M
...which means that on average many of the institutions who collectively hold 80M shares and want to sell before end June could only unload 5% to 10% of their holdings max into the free market
There may be some Institutions out there willing to get into ave for the first time.......
Fidelity, Templeton and Deutche Bank may take the opportunity to further increase their holdings beyond the collective 19% thry currently own
If not
any Institutional sellers must seek a buyer at an acceptible price from among their midst
Since the number of Sellers would exceed the number of Buyers in this situation
....the price of any side deals negotiated outside the free market share price is bound to be less than the ongoing free market price
Indeed for the purposes of Institution to Institution negotiations the free market share price will be considered irrelevant
What all this suggests is that the ave share price is very likely to be well below 60p by close of play on Friday 1 July
Unless
The Institutions keep out of the free market apart from the obligatory "processing" of their private deals
And
There is a significant upsurge in new little men sufficient to outweigh the modest number and volume of little sellers seen today

[iulia] 20/6/2005 17:43

let's get this new thread started, well done gerry.

the chart above has defined a quite wide down channel, interesting to see what the share price will do in the next few weeks, will it break out or stay within, and if the latter, just how low it will go

This is a recovery play with high risk/high reward, people getting in now will do well IF the company recovers, but it could all go belly up in which case everybody loses everything.

I read on the old thread some comments about the value of the brand, people tend to underestimate this. I made good money on RDN, sales bombed out, UK factories closed down, but Royal Doulton - the brand had an intrinsic value and the company was taken over at a good price (for me) though long term holders may not have been too happy.

A similar argument can be built around the AVIS brand, it takes many years and many hundreds of millions of advertising to get anywhere near the recognition that the AVIS brand gets, so there is value there. With a decent management that takes the necessary actions to turn the company around it should not be too difficult to return to profitability. And then we are looking at a share price of multiples of the current price.