TULSA, Okla. — Dollar Thrifty Automotive Group Inc.’s board is unanimously recommending that its shareholders not tender their shares in Hertz’s proposed $2.25 billion buyout of the car rental company.
Dollar Thrifty agreed last month to cooperate with Hertz Global Holdings Inc. to get antitrust clearance for their bid, which includes $57.60 in cash and 0.8546 shares of Hertz common stock. But today the Tulsa, Okla., company said it was advising stockholders hold off on any action.
Hertz has been competing with Avis Budget Group Inc. to acquire Dollar Thrifty. Avis, whose overture includes $45.79 per share in cash and 0.6543 shares of Avis, has been stuck waiting for antitrust approval. That proposal is worth about $1.77 billion at Friday’s prices for Avis shares.
Dollar Thrifty had asked Avis in October not to make a formal offer so that the two companies could work together with antitrust authorities. Avis, based in Parsippany, N.J., agreed to wait.
“Given the uncertainty surrounding the length and outcome of the regulatory process as Hertz and Avis Budget work toward antitrust clearance, the board is recommending that Dollar Thrifty shareholders take no action with respect to the Hertz exchange offer at this time,” Dollar Thrifty President and CEO Scott L. Thompson said in a statement.
Thompson said Dollar Thrifty will monitor the antitrust regulatory process and its board will reconsider its recommendation “if the situation warrants.”
The latest action in the tug-of-war over Dollar Thrifty comes less than a month after Dollar Thrifty announced that its board had adopted a shareholder rights plan — a maneuver designed to deter any unsanctioned attempts to take over the company. On May 18 Thompson said the plan, also known as a “poison pill,” was a temporary measure so that the board could consider any offers to acquire the company without any undue influence that might result in one or more shareholders accumulating significant positions of stock. The plan expires in one year.
Hertz has been in a tussle with Avis Budget over Dollar Thrifty for more than a year, with both looking to snag the company because its clientele is largely leisure travelers. Park Ridge, N.J.-based Hertz and Avis cater mostly to business travelers, so a Dollar Thrifty acquisition would automatically give either one broader appeal.
The potential Dollar Thrifty acquisition is a sign of the times within the car rental industry, as the sector has been consolidating for years. In 2002, Avis’ parent company bought Budget, while Enterprise’s parent company acquired Alamo and National in 2007.
– The Associated Press