Bloomberg
Hertz Global Holdings Inc. raised its offer for Dollar Thrifty Automotive Group Inc. to $1.56 billion, topping Avis Budget Group Inc.’s latest bid.
The new proposal is for $43.60 in cash and 0.6366 of Hertz share for each Dollar Thrifty share. The offer is equal to $50 a share at Sept. 10 closing prices and was agreed to by Dollar Thrifty’s management, Hertz said yesterday. Avis offered $1.36 billion for Tulsa, Oklahoma-based Dollar Thrifty on Sept. 2.
The acquisition, if approved by shareholders, would add the Dollar and Thrifty brands to Hertz’s namesake operations and extend its lead over Avis. Dollar Thrifty shareholders will vote on the proposal Sept. 30, postponing an earlier plan for Sept. 16, Hertz said.
“This is a good offer from Hertz,” John Healy, an analyst at Northcoast Research Holdings in Cleveland, said in an interview. “I think it’s enough to get Dollar Thrifty shareholders happy, but I think Avis can replicate this and maybe do a bit more.”
Hertz, based in Park Ridge, New Jersey, has begun divesting its Advantage Rent-a-Car discount brand to speed the closing of the Dollar Thrifty deal, Richard Broome, a spokesman, said in an interview yesterday.
Dollar Thrifty gained $2.39, or 5 percent, to $50.40 at 10:09 a.m. on the New York Stock Exchange. Hertz rose 71 cents, or 7.1 percent, to $10.76. Avis climbed 55 cents, or 5.4 percent, to $10.77.
The new offer values the 28.7 million Dollar Thrifty shares outstanding at $1.43 billion and provides $122 million to cover options and restricted shares, Broome said.
‘Significant Improvement’
“We are pleased to reach an agreement that reflects the significant improvement in Dollar Thrifty’s operating performance since the initial merger agreement was executed,” Hertz Chief Executive Officer Mark Frissora said in a statement.
Andrew Siegel, an Avis spokesman, declined to comment.
Dollar Thrifty has gained 30 percent since the day before Hertz’s offer of $41 a share in cash and stock was announced in April. The shares traded for less than $1 as recently as March 2009.
Hertz is the largest worldwide airport car-rental brand, operating from more than 8,200 locations in 146 countries. Ford Motor Co. in December 2005 sold Hertz to Clayton Dubilier & Rice Inc., the Carlyle Group and Merrill Lynch’s buyout unit. The car-rental company raised $1.32 billion in an initial share sale less than a year later.
Citigroup Inc. and Morgan Stanley are providing financial advice to Avis, and Kirkland & Ellis LLP and Arnold & Porter LLP are acting as legal counsel.
Barclays Plc and Bank of America Corp.’s Merrill Lynch advised Hertz on its April offer, with Debevoise & Plimpton LLP and Jones Day providing legal advice. Dollar was advised by JPMorgan Chase & Co., Goldman Sachs Group Inc. and law firm Cleary Gottlieb Steen & Hamilton LLP.
The new proposal is for $43.60 in cash and 0.6366 of Hertz share for each Dollar Thrifty share. The offer is equal to $50 a share at Sept. 10 closing prices and was agreed to by Dollar Thrifty’s management, Hertz said yesterday. Avis offered $1.36 billion for Tulsa, Oklahoma-based Dollar Thrifty on Sept. 2.
The acquisition, if approved by shareholders, would add the Dollar and Thrifty brands to Hertz’s namesake operations and extend its lead over Avis. Dollar Thrifty shareholders will vote on the proposal Sept. 30, postponing an earlier plan for Sept. 16, Hertz said.
“This is a good offer from Hertz,” John Healy, an analyst at Northcoast Research Holdings in Cleveland, said in an interview. “I think it’s enough to get Dollar Thrifty shareholders happy, but I think Avis can replicate this and maybe do a bit more.”
Hertz, based in Park Ridge, New Jersey, has begun divesting its Advantage Rent-a-Car discount brand to speed the closing of the Dollar Thrifty deal, Richard Broome, a spokesman, said in an interview yesterday.
Dollar Thrifty gained $2.39, or 5 percent, to $50.40 at 10:09 a.m. on the New York Stock Exchange. Hertz rose 71 cents, or 7.1 percent, to $10.76. Avis climbed 55 cents, or 5.4 percent, to $10.77.
The new offer values the 28.7 million Dollar Thrifty shares outstanding at $1.43 billion and provides $122 million to cover options and restricted shares, Broome said.
‘Significant Improvement’
“We are pleased to reach an agreement that reflects the significant improvement in Dollar Thrifty’s operating performance since the initial merger agreement was executed,” Hertz Chief Executive Officer Mark Frissora said in a statement.
Andrew Siegel, an Avis spokesman, declined to comment.
Dollar Thrifty has gained 30 percent since the day before Hertz’s offer of $41 a share in cash and stock was announced in April. The shares traded for less than $1 as recently as March 2009.
Hertz is the largest worldwide airport car-rental brand, operating from more than 8,200 locations in 146 countries. Ford Motor Co. in December 2005 sold Hertz to Clayton Dubilier & Rice Inc., the Carlyle Group and Merrill Lynch’s buyout unit. The car-rental company raised $1.32 billion in an initial share sale less than a year later.
Citigroup Inc. and Morgan Stanley are providing financial advice to Avis, and Kirkland & Ellis LLP and Arnold & Porter LLP are acting as legal counsel.
Barclays Plc and Bank of America Corp.’s Merrill Lynch advised Hertz on its April offer, with Debevoise & Plimpton LLP and Jones Day providing legal advice. Dollar was advised by JPMorgan Chase & Co., Goldman Sachs Group Inc. and law firm Cleary Gottlieb Steen & Hamilton LLP.
