Word: silverman
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Nowhere has Silverman displayed contrarian instincts more clearly than in the slo-mo rental-car business, from which U.S. automakers have been peeling away as fast as they can (see box). Yet Silverman gladly paid $800 million last year for No. 2 Avis, a global brand that he views as a natural fit with his hotel and resort time-sharing businesses. After overhauling Avis, Silverman plans to sell a stake in the company to the public...
...based in Parsippany, New Jersey, also wants to regain the fast track on Wall Street that it occupied until late last year. HFS zoomed from $4 a share at the time it went public in 1992 to a high of $79.87 last October. No one was happier than Silverman, whose personal holdings topped $600 million in value. Since then the stock has faltered on fears that HFS has gotten too big and unwieldy; but the price has rebounded in recent weeks and closed last Friday at $69 a share. "HFS moves so quickly, and makes so many acquisitions, that...
...Although Silverman was educated as a lawyer, he gravitated to the more treacherous world of dealmaking, cutting his teeth with Wall Street's Blackstone Group in the merger mania of the 1980s. There he was involved in dozens of corporate deals. But don't look for his name in the headlines: he shies away from New York City's mogul madness. As one of his staff says, "He is not part of the scene. You will never see him on Page Six [the New York Post gossip page]. He is focused on business...
That business is complex, which stems from HFS's quasi-consumer strategy. Despite owning the Days Inn and Howard Johnson nameplates, for example, "we are not in the hotel business," says Silverman. "Nor are we in the real estate business.'' The main clients of HFS are the thousands of franchisees who fork over royalties and fees in return for the right to use HFS brand names and receive support services ranging from national advertising campaigns to discounts on Coca-Cola, computers and televisions. The franchisees can even get help setting up employee-retirement plans...
...What we try to do," Silverman says, "is assemble different brands that have huge internal synergies." Take yet another HFS business: time-share vacation properties. More than two million families are members of Resort Condominiums International, the world's largest time-share exchange network, which Silverman picked up for $825 million last year. "When members go to a time-share resort," he says, "they typically rent a hotel room on either side of the week [they have purchased], and obviously we have a hotel network to rent that room to them. Typically that owner will...