11 Sep 2010
Dollar Thrifty accepts new bid by Hertz
NEW YORK – Hertz has raised its offer for rental car company Dollar Thrifty to about $1.43 billion from $1.2 billion in an effort to thwart a rival bid by Avis, according to media reports.
Dollar Thrifty’s board has accepted Hertz Global Holdings Inc.’s new $50-per-share offer — up from the $41 it offered in April — and amended the companies’ merger agreement, The Wall Street Journal reported on its website Sunday evening.
The move comes just days before shareholders of the Tulsa, Okla., company were scheduled to vote on Hertz’s original proposal and as some Dollar Thrifty shareholders have protested the board’s rejection of a $1.3 billion cash-and-stock counteroffer from rival Avis Budget Group Inc.
Dollar Thrifty Automotive Group Inc. has said that the Avis proposal did not include deal protection measures or adequately address antitrust concerns. Parsippany, N.J.-based Avis had offered a deal valued at more than $47 per share, but without the $45 million breakup fee that Park Ridge, N.J.-based Hertz agreed to pay if it fails to complete its acquisition.
Dollar Thrifty has suggested that Avis runs a higher risk of not winning antitrust clearance for the deal because its Budget Rent A Car division and Dollar Thrifty have similar market shares of airport car rentals aimed at leisure travelers, while Hertz’s Advantage Rent A Car has only a tiny slice of that market.
Whichever company acquires Dollar Thrifty will have to compete in an increasingly consolidated rental car market full of customers hoping to rent wheels for as little as possible as economic conditions remain unstable.
Under terms of the new deal, Hertz is raising the cash portion of its offer by $10.80 per share, the Journal said. Other terms of the merger agreement, including a $44.6 million reverse breakup fee, remain unchanged. The Dollar Thrifty shareholder vote has been postponed until Sept. 30 from Sept. 16 to give shareholders time to review the new offer, the paper said.
Messages left with Hertz and Dollar Thrifty weren’t immediately returned late Sunday.