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Opinion
Chris Bryant

Hedge Funds Just Love Expensive Rental Cars

Volkswagen may have to pay up if it wants to acquire Europcar. Its hedge fund owners are in a nice position but they shouldn’t get too greedy.

Pricey rentals.

Pricey rentals.

Photographer: Matt Lloyd/Bloomberg

It’s a sign of just how rapidly the fortunes of the car-rental industry have improved that Europcar Mobility Group felt comfortable rejecting a 2.2 billion-euro ($2.6 billion) takeover bid from Volkswagen AG, saying it failed to “reflect the company’s full value and value creation potential.” Details of that spurned offer were first reported by Bloomberg News.

Just a few months ago, Europe’s largest car-rental operator was forced to file for Chapter 15 bankruptcy protection. When the pandemic brought travel to a halt, the French group’s revenues plunged more than 40% last year and its debts became unsustainable.