Dollar Thrifty accepts $1.43B bid from Hertz

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Published: September 13,2010

Tags: automobiles, mergers and acquistions, rentals

PARK RIDGE, N.J. — Dollar Thrifty has accepted a new bid of about $1.43 billion from Hertz, which is battling Avis for the rental car company.

Dollar Thrifty Automotive Group Inc.’s board said late yesterday that it 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 offer was made in an attempt to thwart a rival $1.3 billion cash-and-stock counteroffer by Avis Budget Group Inc.

In pre-market trading today, Dollar Thrifty shares were up 4.1 percent from Friday’s close, to $50.

Hertz’s new offer gives Dollar’s stockholders $43.60 in cash for each share they own, which is $10.80 higher than the prior offer. Shareholders will also receive 0.6366 of a share of Hertz common stock and approximately $6.87 per share to be paid by Dollar Thrifty as a special cash dividend immediately prior to the acquisition’s completion.

The $44.6 million reverse breakup fee is still in place and Hertz said it has started the process of selling Advantage Rent-a-Car to ensure the deal closes quickly. Hertz Chairman and CEO Mark Frissora said in a statement that the Park Ridge, N.J., company has already received interest in Advantage from “several unsolicited parties.”

Some Dollar shareholders had protested the board’s rejection of the Avis offer, but Dollar Thrifty has said that the Avis proposal did not include deal protection measures or adequately address antitrust concerns. Parsippany, New Jersey-based Avis had offered a deal valued at more than $47 per share, but without the breakup fee that 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.

Dollar Thrifty, of Tulsa, Oklahoma, pushed back a special shareholders meeting meant to vote on Hertz’s proposal to Sept. 30 from Thursday.

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