Hertz Global Holdings Inc. (HTZ:US), which has been trying to acquire Dollar Thrifty Automotive Group Inc. (DTG:US) for more than two years, said today it reached a “material agreement” to divest its Advantage rental-car brand.
Selling Advantage is a key step toward getting antitrust clearance for a Dollar Thrifty acquisition, analysts have said.
“We have agreed on the material terms of a divestiture of our Advantage business with a potential buyer and have provided those terms to” the U.S. Federal Trade Commission, Mark Frissora, Hertz’s chief executive officer, said on an earnings conference call today.
Hertz has been trying to divest the Advantage brand to help smooth approval to acquire Dollar Thrifty, the fourth-largest U.S. rental-car chain. That would solidify its position behind closely held Enterprise Holdings Inc., the largest U.S. car- rental company. The company has made “substantial progress” in obtaining antitrust approval, Frissora said today.
In October, Hertz said it withdrew its exchange offer for Dollar Thrifty because of market conditions and the target company’s share-repurchase program. Dollar Thrifty said Oct. 11 it wanted to take itself off the market and would begin to buy back as much as $400 million in shares after Nov. 1.
Hertz in October it would continue to pursue FTC approval to buy Tulsa, Oklahoma-based Dollar Thrifty, and would assess the proper offer price based on the buyback, market conditions and Dollar Thrifty’s performance.
Hertz, based in Park Ridge, New Jersey, fell 3.5 percent to $15.66 at the close in New York. Dollar Thrifty rose 0.3 percent to $81.97. Dollar Thrifty has risen 17 percent this year, compared with a 34 percent gain for Hertz.
Dollar Thrifty shareholders rejected Hertz’s takeover proposal in September 2010. Hertz, after calling that bid “final,” renewed its pursuit with an offer in May 2011.
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