ALAMO Rent A Car has declined to comment on speculation that it is in the early stages of talks over a possible acquisition by HFS, the giant US hotel and real estate group.

HFS has acquired Avis in the US, which specialises in corporate rentals, and rumours that it has now cast its eye on Alamo, whose strength in the American market lies in the leisure sector, are spreading. An Alamo spokesman in Fort Lauderdale said it was company policy never to comment on rumours about acquisition.

Alamo recorded losses in excess of $12 million in the first quarter of 1996, and 1995 was the first year in its 21 year history that it failed to finish in the black. However, business is understood to have picked up considerably, and the company expects to show a profit again by the end of the year.