Hfs Strikes Deal To Acquire Avis

HFS Inc. reached a final agreement to pay about $800 million in cash and stock for Avis Inc., and said it plans to sell a majority stake in the car rental business in an initial public offering next year.

The Avis purchase, which will add a widely recognized car rental brand to HFS’ stable of hotel and real estate names, still needs the approval of those who participate in the Avis employee stock ownership plan, which owns 71 percent of Avis.

The transaction is expected to close in October. At the time the transaction was announced last month, the company said it would spin off to shareholders the car rental company’s assets and debt, keeping just the Avis brand name.

HFS shares rose 75 cents to close at $62.50 with 495,900 changing hands, about half the three month daily average of 842,700.

Under the agreement announced Friday, HFS will offer Avis’s 13,500 workers $35 a share for their 9.7 million shares. The plan is managed by U.S. Trust Corp. In addition, General Motors Corp. owns preferred stock that is convertible into a 29 percent stake.

The Avis name would then be licensed to owners of Avis Rent a Car franchises.