Hertz has second bite at Dollar Thrifty, offers $2.1 billion

By @ibtimes on

Hertz Global Holdings Inc is back in the market for smaller car rental firm Dollar Thrifty , offering close to $2.1 billion, taking advantage of rival Avis Budget's problems getting regulatory clearance for a rival bid.

Hertz first bid for Dollar Thrifty in April, 2010, but following a bidding war with Avis, the Hertz offer was voted down by Dollar Thrifty shareholders in September.

Hertz's second bid for Dollar Thrifty comes at a time when the car rental industry is seeing demand improving, helped by a rebound in the travel and tourism business.

Dollar Thrifty last week reported market-beating quarterly results and raised its profit outlook for the year.

Hertz said it will go direct to Dollar Thrifty shareholders offering $72 a share -- a 3 percent premium to Dollar Thrifty's Friday close -- comprising $57.60 in cash and 0.8546 Hertz shares.

Dollar Thrifty and Avis have been pursuing antitrust clearance since October. Avis' cash-and-stock offer for Dollar Thrifty currently stands at $1.67 billion based on Avis' Friday close.

That protracted process -- Avis already has a budget brand that competes with Dollar Thrifty -- has brought Hertz back into the fray.

Avis Budget has been unable to produce a viable antitrust remedy, despite an entire year of discussions with the FTC with no end in sight, said Hertz CEO Mark Frissora, referring to the U.S. Federal Trade Commission.

Hertz has said it will sell its low-cost Advantage brand.

Barclays Capital, Lazard, Bank of America Merrill Lynch and Deutsche Bank Securities are acting as financial advisers to Hertz.

Hertz shares hit a 41-month high earlier this month and Dollar Thrifty shares have gained 48 percent so far this year as part of a 14-fold increase in 2 years. On Nasdaq, Avis shares are up 18 percent this year. (Reporting by A. Ananthalakshmi in Bangalore; Editing by Maju Samuel and Ian Geoghegan)

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