Avis (CAR:US) Budget Group Inc. has decided against renewing its bid for Dollar Thrifty Automotive Group Inc. (DTG:US) after meeting with the company in the past month, according to a person with knowledge of the meeting.
Dollar Thrifty, which is the target of a stalled takeover attempt by Hertz Global Holdings Inc. (HTZ:US), contacted Avis to solicit a new offer, said the person, who asked not to be identified because the process is private. Avis ended a previous formal pursuit of Dollar Thrifty in September 2011.
The decision may leave Hertz as the only potential suitor for Dollar Thrifty, which has been an acquisition target for Hertz for more than two years. Dollar Thrifty shareholders rejected Hertz’s 2010 bid to buy the company for about $1.2 billion. Hertz made another offer last year that it later withdrew, citing market conditions.
“It’s a little surprising that Avis outright rejected it,” Fred Lowrance, a Nashville, Tennessee-based analyst at Avondale Partners, said today in a telephone interview. “But I seriously doubt this whole thing is over with.”
Dollar Thrifty’s market value is about $2.1 billion, based on today’s close. Avis made its initial bid for Dollar Thrifty in July 2010 before sweetening it to about $1.52 billion two months later.
Avis pulled its previous offer because it felt Tulsa, Oklahoma-based Dollar Thrifty was getting too expensive and decided not to pursue another bid for the same reason, according to the person familiar with the situation. Dollar Thrifty was trading below $1 in March 2009.
Anna Bootenhoff, a spokeswoman for Dollar Thrifty, didn’t respond to an e-mail or voice mail seeking comment. Alice Pereira, a spokeswoman for Parsippany, New Jersey-based Avis, and Richard Broome, a spokesman for Park Ridge, New Jersey-based Hertz, declined to comment.
While Hertz reaffirmed in a July 31 statement that it wants to proceed with an acquisition, Dollar Thrifty Chief Executive Officer Scott Thompson said Aug. 1 Hertz should make a “compelling offer” or end the process.
“While we believe that things should finally come to a conclusion, we are still open to the very real possibility of a win-win transaction with another larger rental car company,” Thompson said then.
Hertz is still trying to sell its Advantage unit to appease Federal Trade Commission antitrust concerns about a purchase.
Dollar Thrifty rose less than 1 percent to $77.04 as of 4 p.m. New York time, after falling as much as 3.5 percent earlier. The shares rose 8.8 percent this year through yesterday. Avis dropped 2 percent to $15.17, while Hertz climbed 3.9 percent to $11.71.
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