Hertz to buy Dollar Thrifty for $2.3 bn after years of standoff
27 Aug 2012
The world's largest car rental company, Hertz Global Holdings, yesterday struck a deal to buy its smaller rival Dollar Thrifty Automotive Group for about $2.3 billion, ending a more than two years takeover battle with arch rival Avis Budget Group.
Park Ridge, New Jersey-based Hertz has offered to pay $87.50-a-share, a premium of 8 per cent to Dollar Thrifty's closing price of $81 on 24 August. The offer price is more than double the $41 per share that Hertz had offered in April 2010.
The deal is worth around $2.6 billion, but Hertz will pay around $2.3 billion since Dollar Thrifty has almost $300 million in cash in its balance sheet at the end of June.
"Hertz has made a compelling offer to our stockholders that reflect the strength of our business and our team. Hertz is the logical partner for us with the resources to expand our value focused leisure brands in key car rental markets around the world," said Scott Thompson, president, CEO and chairman of Dollar Thrifty.
"After three years of merger-related activity and speculation, I am pleased that we have reached a win-win transaction for both Hertz and Dollar Thrifty," he added.
Hertz has agreed to sell its smaller unit Advantage Rent A Car-a competitor to Dollar Thrifty, to Franchise Services of North America and Macquarie Capital, in order to gain regulatory approval for the acquisition.
