Avis Budget shares rally on Zipcar deal

<p>Shares in Avid Budget have gained after the car hire firm announced its Zipcar deal.</p>

Shares in Avid Budget have advanced on the technology-heavy Nasdaq in New York this afternoon (January 3rd) on news the company has agreed to buy Zipcar, the world's largest car-sharing business.

The global vehicle hire organisation has signed on the dotted line to acquire Zipcar for $500 million (£307 million).

This is seen as a worthy investment for Avis, which claims the growing car-sharing market is worth $400 million in the US alone.

Zipcar has 767,000 members who pay an annual joining fee and are then charged an hourly rate to use its cars.

Avis will pay $12.25 per share for Zipcar, which is nearly 50 per cent more than the shares were trading at towards the end of last year.

At 16:30 GMT on the Nasdaq, shares in Avis were stable at $20.79 per unit, while Zipcar shares steadied after an initial rally at $12.17 per share.

Find out about the Nasdaq and spread betting strategies at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.