Avis Europe plc Offers to Purchase Selected Budget Assets

    BRACKNELL, England--Jan. 22, 2003--Avis Europe plc, the leading car rental company in Europe, Africa, the Middle East, and Asia, has signed an agreement to acquire certain assets of Budget International, including the rights to use the trademark and name throughout Europe, the Middle East and Africa, together with the existing Budget licensee agreements and royalty streams in those territories.
    The acquisition is still subject to confirmation through the US Chapter 11 court process, and reaching a separate agreement with the administrator in France. It is anticipated that completion will take place towards the end of February.
    The aggregate purchase price will be $20 million in cash, plus a pre-closing secured credit facility of up to $3.4 million. A further amount, to be finalised, will be payable to the French administrator for the purchase of the French assets. The assets and trademark rights are to be acquired debt free, except for the acquisition of the Austrian business, which includes debt equal to the fleet assets. Completion of the acquisition of all the businesses is inter-conditional.
    Following completion of the transaction, Budget would continue as a separate brand, supplying car rental for the budget focused traveler.
    Based on the terms of the transaction, the acquisition is expected to be marginally earnings dilutive in the first full year following completion.

    Mark McCafferty, Chief Executive of Avis Europe plc said:

    "Prime opportunities to buy a major brand and an established royalty stream at fair value do not come along everyday. With support from a highly experienced Avis team and a revitalized strategic direction, Budget would provide an ideal partnership with our existing network, complementing our balanced international growth strategy.
    "This would strengthen our market leadership in Europe, the Middle East and Africa. There will be clear cost efficiencies from joint service support functions and the Budget brand is well positioned for the budget focused business and leisure traveler."

    James Cohen, Chief Operating Officer of Budget International said:

    "We believe Avis has proven experience to grow the car rental business both in Europe and other less developed car rental regions including the Middle East and Africa. They also have significant experience of operating a large licensee business, so the vision of the two brands working alongside each other is very powerful."
    Budget within Europe, the Middle East and Africa operates out of predominately franchise networks, with around 1,000 locations, and some 56,000 cars, and is believed to currently have around 2% of the European car rental market.
    Budget filed for Chapter 11 bankruptcy protection on July 29, 2002. The proposed agreement between the two parties relating to Europe, the Middle East and Africa, is being put to the Chapter 11 Court proceedings in the US, following the purchase of Budget assets in the United States, Canada, Australia, New Zealand and Latin America by Cendant Corporation in November 2002.

    Avis Europe plc rents cars under the Avis brand name to customers in 105 countries. Avis Europe's ordinary shares trade on the London Stock Exchange. Prices may be accessed on Bloomberg under the symbol AVE LN and Reuter Equities 3000 Service under AVE.L. Additional information is available on Avis Europe's internet site: www.avis-europe.com.