Beatrice Cos. Will Sell Avis Car Rental Unit to Wesray
Someone new is in the driver’s seat at Avis Rent a Car System, which seems to go through owners faster than some people go through cars.
The nation’s No. 2 car rental company is being sold to Wesray Capital Corp., a New Jersey investment firm headed by former Treasury Secretary William E. Simon, it was announced Tuesday.
Wesray’s bid for Avis apparently topped a $175-million cash offer from Warren E. Avis, who founded the firm in 1946 and sold it eight years later for $8 million. Avis, who resides in Ann Arbor, Mich., said Tuesday that he was disappointed that he didn’t regain control of the rental car company, which has been through 10 owners during the last 40 years, including ITT, Norton Simon, Esmark and, most recently, Beatrice Cos.
The amount paid by Wesray for Avis wasn’t disclosed, although Warren E. Avis said he understood that the bid was about $300 million. Securities analysts who follow Beatrice had expected Avis to fetch between $100 million and $400 million. Beatrice said Wesray agreed to pay cash.
Raymond Chambers, president of Wesray, didn’t return telephone calls to the investment firm’s Manhattan office Tuesday.
Wesray first expressed interest in Avis last November, when it said it planned a bid for the company with several Avis licensees.
Avis, based in Garden City, N.Y., operates 3,500 car rental agencies in 135 countries. It is the largest car rental company overseas and second domestically to Hertz, which is owned by UAL, parent of United Airlines. For the six months ended Aug. 31, 1985, Avis earned $85 million on sales of $503 million. An Avis spokeswoman said the company’s revenue is close to $1 billion a year.
Beatrice, a Chicago-based food and consumer products company, put Avis and three other businesses up for sale last October. At the time, Beatrice said the units were being sold because they didn’t fit well with the company’s other food and consumer products businesses, which include such items as Tropicana orange juice, Playtex gloves and Samsonite luggage.
Beatrice’s public shares were acquired for $6 billion by Kohlberg, Kravis, Roberts & Co., which took it private last November.
Wesray, based in Morristown, N.J., owns an amalgamation of companies, including appliance maker Proctor Silex, Atlas Van Lines and Wilson Sporting Goods.
In February, it participated in the $625-million purchase of six television stations and four radio stations from a group controlled by the Rockefeller family. Many of Wesray’s acquisitions have been made through leveraged buy-outs, in which funds borrowed to acquire a company are secured by the acquired firm’s assets or cash flow.
