Wednesday’s NYT had an utterly hysterical tale of the history of the Avis saga, by Michael Kinsley. Here’s an excerpt:
"Since 1946, Avis has been sold or reorganized 17 or 18 times,
depending on how you count. Each time Avis changed hands or structure,
there have been fees for bankers and fees for lawyers, bonuses for the
top executives and theories about why this was exactly what the company
In 1972, ITT spun off Avis as a publicly traded company. Then, in
1977, the company was bought by another giant conglomerate, Norton
Simon. In 1983, a company called Esmark (formerly Swift & Co.)
bought Norton Simon.
In 1984, Esmark was bought by Beatrice Foods, and
in 1986, Beatrice was bought by the leveraged buyout firm Kohlberg
Kravis Roberts & Company. Kohlberg Kravis Roberts immediately sold Avis to an investment group
called Wesray. Wesray sold Avis’s fleet leasing business to a company
called PHH Group. Then it spun off Avis’s foreign operations and took
them public as a company called Avis Europe P.L.C. And then, in 1987,
Wesray sold Avis to its employees under an employee stock ownership
program. Wesray more than tripled its money in 14 months.
Two years after the stock ownership deal, the company sold General
Motors a complicated security that effectively gave it a 26 percent
stake in Avis. Apart from that, Avis’s employee ownership experiment
lasted nine years, until 1996, when Avis sold itself to a company
called HFS. Employees got an average of $26,000 each. Eighty or 90
current and former Avis executives got an average of $1.75 million
A year later, in 1997, HFS took Avis public. (The initial public
offering raised just over $330 million. The banker Bear Stearns charged
$15 million for its services.) In 1999, Avis bought PHH. Remember PHH?
That was the company Avis sold its fleet leasing operation to in 1987.
PHH was owned by Cendant, a company that had been formed in 1997 by the
merger of HFS — right, the company that had spun off Avis in 1997 — and
another company called CUC. HFS had retained 19 percent of the
company’s stock when it took Avis public. With the stock portion of
Avis’s purchase price for PHH, Cendant now owned 34 percent of Avis…"
They try harder cause they have to!
We Try Harder (but What’s the Point?)
NYTimes, May 16, 2007