To counter a bid by rival Avis Budget Group Inc., Hertz Global Holdings Inc. made an offer to buy Dollar Thrifty Automotive Group Inc. for $2.24 billion in cash and stock.
Hertz, the largest publicly traded rental-car company, offered $72 a share, which is 24% higher than what Avis offered. Hertz, whose offer was rejected previously, wants to prevent the merging of Avis and Dollar Thrifty (the third- and fourth-largest U.S. rental car companies).
Avis and Dollar Thrifty have been asking the U.S. Federal Trade Commission to approve this deal. Fred Lowrance, an analyst with Avondale Partners LLC in Nashville, Tenn., believes that the bidding process will not end here and expects Avis to act soon.
Hertz's offer, which isn’t dependent on financing conditions, consists of $57.60 in cash and 0.8546 Hertz shares. Hertz said that this includes options and equity awards. Dollar Thrifty has 31.2 million shares outstanding, putting the value of the offer at $2.24 billion.
Hertz said that the rental-car company, which has started the process of selling its Advantage brand to facilitate FTC approval, has begun talks with the regulator.
In the statement, Hertz CEO Mark Frissora said that it has made a “superior bid," which he refers to as an 18% premium to the 60-day average share price. He said that the company is hoping to reach a “consensual business combination” with Dollar Thrifty and is working on an “accelerated timetable."