Avis Budget Eyes $650 Million Settlement, JPMorgan Raises Target to $155
CAR•Avis Budget Group agreed to a $650 million Section 16(b) settlement with Pentwater Capital, pending court approval, which would bolster its balance sheet. JPMorgan raised its price target to $155 from $140 while Barclays also lifted its outlook, citing demand from upcoming major events.
1. Settlement Agreement Reached
On June 19, Avis Budget disclosed in an SEC filing that it entered into a Settlement and Release Agreement with Pentwater Capital Management and related parties under Section 16(b) of the Securities Exchange Act, aiming to recover alleged short-swing trading profits.
2. Financial Implications
The proposed resolution calls for Pentwater to pay $650 million in cash, subject to court approval, which would strengthen Avis Budget’s cash reserves and bring the legal dispute to a close upon finalization.
3. Analyst Price Target Increases
Earlier in June, JPMorgan raised its price target on Avis Budget shares to $155 from $140 while Barclays also lifted its outlook, citing potential rental demand from the upcoming FIFA World Cup and America 250 celebrations.
