Zipcar Inc. was sued by an investor who claims that Avis Budget Group Inc.’s takeover offer for the short-term car rental company is inadequate.
The $491 million sale to Avis Budget shortchanges Zipcar shareholders, Martin Bertisch alleged in a complaint filed today in Delaware Chancery Court in Wilmington.
Zipcar’s board failed to take all necessary steps to ensure that shareholders will receive the maximum value for their shares, lawyers for Bertisch said in the filing. The merger agreement also includes preclusive deal protection devices that will benefit Avis Budget instead of Zipcar and its shareholders, according to the complaint.
With the Zipcar deal, Avis Budget becomes the latest company to pursue the fast-growing market for young, urban customers who want to rent cars by the hour, rather than owning their own vehicles. Enterprise Holdings Inc. and Hertz Global Holdings Inc., the two largest U.S. car-rental companies, have already rolled out offerings for such customers.
Karen Drake, a spokeswoman for Zipcar, declined to comment on the lawsuit.
Zipcar, founded in 2000, projected its first annual profit this year of as much as $4 million. The company’s board agreed to Avis Budget’s bid of $12.25 a share, a 49 percent premium on the Cambridge, Massachusetts-based company’s Dec. 31 closing price. That is also a 32 percent discount to Zipcar’s initial public offering price of $18.
Bertisch is seeking to represent all shareholders in his request for a court order barring the deal.
The case is Bertisch v. Zipcar Inc., CA8185, Delaware Chancery Court (Wilmington).