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Hertz makes new bid for car rental company Dollar Thrifty

Consumer Reports News: May 11, 2011 03:58 PM

In a move to beat out rival Avis, car rental company Hertz, raised its offer for Dollar Thrifty Automotive Group. Hertz’s previous offer was turned down by Dollar Thrifty last September. Instead, Dollar Thrifty shareholders favored a counter offer from Avis.

The Avis offer was $45.79 in cash and 0.6543 in shares. The new Hertz proposal includes $57.60 in cash and 0.8546 in shares. After its latest offer, Hertz reported that it is also in talks with the Federal Trade Commission in order to close the deal.

The bidding war between Hertz and Avis for Dollar Thrifty has been an ongoing saga. Last fall, for example, shareholders at Dollar Thrifty rejected a merger deal with Hertz, that was valued at $51 a share.

Bidding war over the last year:
(Information from the Wall Street Journal)

  • April 2010: Hertz offers to buy Dollar Thrifty for $1.27 billion, after talks that started in November 2009.
  • May 2010: Avis says it may top the bid from Hertz. Avis said Dollar Thrifty had refused to deal with Avis. Dollar Thrifty turned around and said it would entertain an Avis offer if it were higher than the Hertz merger pact.
  • July 2010: Avis offers $46.50 a share for Dollar Thrifty, in a bid comprised of cash and stock. Hertz says that a marriage between Avis and Dollar Thrifty will face regulatory risk.
  • September 2010: Avis bumped the cash portion of its bid to about $47.13 a share. Hertz then raised its offer to $50 a share. Hertz and Dollar Thrifty agree to amend their merger agreement. Dollar Thrifty postpones a shareholder vote on the merger to give investors more time to mull the new offer.
  • September 23, 2010: Dollar Thrifty shareholders set to vote on the Hertz offer, but Avis raises its cash offer to about $53 a share. Hertz says it won’t raise its offer.
  • September 30, 2010: Dollar Thrifty shareholders vote down the Hertz offer.

And if you plan to rent a car, avoiding paying with a debit card. If you use a debit card, you can expect a hold of up to $500 on your account, limits on the size car you rent, plus a credit check, or proof of employment. These and other hassles are detailed in Buck the trend of car-rental surprises, a report in the June issue of Consumer Reports, which also has advice on how to deal with rental car surprises.

Hertz-Dollar Thrifty Deal Is Back! [Wall Street Journal]

Maggie Shader


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