Bloomberg News

Dollar Thrifty Fails to Elicit ‘Final’ Hertz Bid at Deadline

October 10, 2011

Oct. 10 (Bloomberg) -- Dollar Thrifty Automotive Group Inc., the target of 18 months of bidding, failed to flush out a “best and final” offer from Hertz Global Holdings Inc. by today’s deadline.

Hertz, the second-largest U.S. car-rental company, is Dollar Thrifty’s lone suitor after Avis Budget Group Inc. dropped its pursuit Sept. 14. Dollar Thrifty told Hertz and Avis in letters dated Sept. 6 it wanted final bids submitted by 5 p.m. New York time today.

Hertz has been seeking U.S. Federal Trade Commission approval to buy Dollar Thrifty, the fourth-largest U.S. rental- car chain. Hertz is trying to divest its Advantage brand to help smooth that approval.

“When Avis dropped out, Dollar Thrifty lost control of the process,” Fred Lowrance, a Nashville, Tennessee-based analyst at Avondale Partners LLC, said in a phone interview. “Now they’re just waiting on Hertz.”

Hertz wants to buy Dollar Thrifty to keep its position behind Enterprise Holdings Inc. The nation’s four biggest car- rental chains generate 83 percent of U.S. car-rental sales, according to a September report from IBISWorld, the Santa Monica, California-based industry researcher.

Closely held Enterprise had a 40 percent share, followed by Hertz with 20 percent and Avis with 17 percent. Dollar Thrifty accounted for 5.7 percent of the industry’s sales, IBISWorld said.

Dollar Thrifty shareholders rejected Hertz’s offer in September 2010. Hertz, after calling that bid “final,” renewed its pursuit in May with an offer valued at $1.92 billion. Dollar Thrifty recommended on June 6 that investors not accept Hertz’s bid because it undervalues the company.

“Hertz remains interested in acquiring Dollar Thrifty and continues to pursue an FTC consent decree,” Rich Broome, a spokesman, said in an e-mail.

Shares of Dollar Thrifty rose 1.2 percent to $60.40 at the close in New York. Hertz gained 4.6 percent to $10.08 while Avis shares increased 5.6 percent to $11.22.

--Editors: Bill Koenig, Jamie Butters

To contact the reporter on this story: Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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