Avis may trump Hertz's $1.2 billion bid for Dollar Thrifty
04 May 2010
Barely a week after the world's largest car rental company Hertz Global Holdings Inc (Hertz) agreed to acquire Dollar Thrifty Automotive Group Inc (Dollar Thrifty), its rival Avis Budget Group Inc (Avis) came out yesterday with an assertion that the firm would like to make a significantly higher offer for Dollar Thrifty.
In a letter addressed to Dollar Thrifty's chairman Thomas Capo and president and CEO Scott Thompson, chairman and CEO of Avis Ronald Nelson said: "We would like to make a substantially higher offer to acquire Dollar Thrifty, especially in light of your recent performance and the potential synergies associated with an acquisition of Dollar Thrifty by Avis Budget."
Last week, Hertz offered $41 per share comprising 80 per cent cash and 20 per cent stock for Dollar Thrifty, which has an aggregate value of approximately $1.2 billion.
(See: Hertz Global to take over rival Dollar Thrifty in $1.17 billion deal)
Oklahoma-based Dollar Thrifty has a strong presence in the top US and Canadian airports through its Dollar Rent a Car and Thrifty Car Rental brands and employs around 6,000 people.
The acquisition, if materialised would add another 1,550 locations to the existing 6,500 car and truck rental locations of Avis.
Avis said that Hertz's offer of $41 per share of Dollar Thrifty does not virtually offer any premium. Hertz is funding only $34 per share, as Dollar Thrifty would be paying a special cash dividend of $6.88 per share to its shareholders prior to closing of the deal.
Despite the interest shown by Avis on entering into a transaction with Dollar Thrifty, it failed to respond, the company said.
Avis has requested access to Dollar Thrifty's legal, financial and business information, including access to management, so that the company can submit its offer. The company also expressed confidence that the antitrust clearance timetable for the transaction would be similar to that associated with a Hertz deal.
