Avis Budget Reaches New Agreement With SRS Investment Management, Adds $300 Million To Share Repurchase Authorization

Shares of Avis Budget Group Inc. CAR surged higher by more than 6 percent on Tuesday after the company announced it has entered into a new agreement with its largest stockholder and also announced an update to its stock repurchase authorization.

Avis Budget Group detailed a new agreement with its largest stockholder, SRS Investment Management. As part of the agreement, Brian Choi, a designee of SRS, will be appointed to the company's Board of Directors. In addition, SRS will be given the right to recommend an independent director that is not affiliated with SRS to be added to the Board of Directors, subject to the company's reasonable approval.

"We are pleased to welcome Brian to the Board and are confident that the skills and expertise that he and the other new independent director will bring to the Board will add valuable insight as we continue to execute on our strategy," said Ronald L. Nelson, Avis Budget Group Executive Chairman. "SRS has maintained a constructive relationship with us for several years, sharing a consistent view of where our industry is headed and a focus on our Company's long-term growth opportunities."

SRS has also agreed to vote all of its shares in favor of Avis Budget Group's nominees at the 2016 annual meeting.

Share Buyback Authorization Update

Avis Budget Group also stated that its Board of Directors has approved a $300 million increase to the company's share repurchase authorization. The company noted that as of September 30, 2015, $258 million remained on the company's buyback authorization.

Avis Budget Group first launched its share buyback program in August 2013. Through September 30, 2015, the company bought back more than $625 million worth of its stock which resulted in a reduction in the share count by more than 13 million shares, or 12 percent of the entire float.

"In light of our strong third quarter 2015 performance and expectation that our Adjusted EBITDA will be at record levels in 2015, we are pleased to increase our share repurchase authorization," said Larry D. De Shon, Avis Budget Group's Chief Executive Officer. "We remain focused on allocating capital to the most attractive opportunities, and this expansion of our share repurchase authorization underscores the continued confidence we have in the long-term prospects of our business as well as our commitment to returning capital to stockholders."