Jul. 29–A New York hedge fund is a step closer to taking control of Alamo Rent A Car and National Car Rental System after a planned auction of ANC Rental Corp.’s assets attracted no additionalbidders.
ANC can skip the auction and proceed to a Delaware bankruptcy court hearing Aug. 6, at which time a judge will decide whether to approve the sale of the Fort Lauderdale company’s assets to Cerberus Capital Management. If the sale is approved, a late August closing is anticipated.
Cerberus has offered to pay $230 million, assume $60 million in nonvehicle debt and provide $150 million line of working capital for ANC’s assets. The fund also agreed to assume more than $2 billion in vehicle debt.
William N. Plamondon III, ANC’s chief executive, said he wasn’t surprised that no other bidders stepped forward. He cited the weak travel environment and the size of Cerberus’ offer.
‘I think it would be a reflection on the travel industry and that Cerberus’ bid is considered a pretty strong bid,” Plamondon said by phone.
Still, Plamondon conceded his preference would have been to hold an auction to ensure that ANC obtained the highest offer for its assets.
Cerberus invests in financially troubled companies. Cerberus typically relies on seasoned industry executives when it targets distressed companies for acquisition. With ANC, it brought in William Lobeck, who oversaw Alamo and National when they were part of AutoNation. Cerberus anticipates Lobeck will take the reins following the sale.
Dick Auletta, a Cerberus spokesman, declined to comment on the news that the auction will not have to be held. The auction had been scheduled for Aug. 4 in the offices of a New York law firm.
As a prelude to an auction, ANC chose Cerberus in May from a pool of four bidders that had been narrowed from 22.
Among the bidders were investment firms, financial players teamed with auto-industry executives and an “auto-rental industry competitor.” All signed confidentiality agreements, so their names were never disclosed.
Cerberus’ offer was called a “stalking-horse bid” and set the bar for any competing bids.
When the bankruptcy court last month allowed ANC to go ahead with the auction, Lazard, ANC’s investment banking firm, contacted all of the original prospective bidders, Plamondon said. They had until Friday to submit a qualified bid.
Plamondon said he doesn’t envision anyone filing objections to the sale. An objection to the auction was made by the unsecured creditors’ committee, but the creditors withdrew their complaint after ANC agreed to make changes in the bidding process.
‘From the employees’ side, they’re glad they know at least one thing is settled,” Plamondon said. ANC employs 11,336 people in the United States, including about 1,700 in South Florida.
ANC filed for bankruptcy in November 2001, about two months after the terrorist attacks that crippled the travel industry.
Among the companies Cerberus has purchased either by itself or as part of a group are Fila, the Italian sportwear and athletic-shoe maker, and the consumer lending division of insurance giant Conseco.
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