Dollar Thrifty seeks "best, final" offers
8/22/2011Dollar Thrifty Automotive Group Inc., which has been a target of unsolicited takeover bids since April 2010, is asking its two suitors to make “best and final” offers by early October.
Hertz Global Holdings Inc. and Avis Budget Group Inc., the two largest U.S. auto rental chains, have been seeking Federal Trade Commission approval to buy Dollar Thrifty, the fourth- largest U.S. rental car company.
Avis has been seeking the same regulatory approval since Dollar Thrifty shareholders rejected Hertz’s offer last September. Hertz, after calling its last bid “final,” renewed its pursuit in May with an offer valued at $1.91 billion, based on Aug. 19 closing prices. Avis’s offer is valued at $1.55 billion.
“This has been going on for a long time,” Scott Thompson, Dollar Thrifty’s chief executive officer, said in an interview. “From everything we’ve seen from the FTC lawyers, both companies have what they need to know, what they need to do to clear FTC approval. They should be in a position to make a credible compelling bid if they want to.”
Hertz is trying to thwart the proposed combination of Avis and Dollar Thrifty with an exchange offer. Dollar Thrifty recommended June 6 that investors reject Hertz’s second bid saying it undervalues the company.
Shares Decline
Dollar Thrifty closed at $83.74 on June 3 in New York Stock Exchange trading and has since declined 26 percent, to $61.91 as of Aug. 19. As of that date, Hertz had fallen 33 percent this year to $9.71 and Avis had dropped 25 percent to $11.61 on the Nasdaq Stock Market.
“This is a very positive development for the industry,” Fred Lowrance, an analyst with Avondale Partners LLC in Nashville, said in an e-mail. “M&A uncertainty has been an overhang on all of these stocks, and investor and management team frustration with the length of the process has become palpable.”
Any new bids should be submitted by early October, Tulsa, Oklahoma-based Dollar Thrifty said in its statement today.
“After October 1 we’ll find out who’s serious and who’s not,” Thompson said.