Dollar Thrifty Should Reject Hertz, RiskMetrics Says
Dollar Thrifty Automotive Group Inc. shareholders should reject Hertz Global Holdings Inc.’s $1.12 billion offer because the valuation isn’t “compelling,” independent adviser RiskMetrics Group Inc. said in a note.
The offer values Dollar Thrifty at 5.2 times its 2011 corporate earnings before interest, taxes, depreciation and amortization, while the company’s fairness opinion notes a historical adjusted enterprise value of 6.1 times Ebitda for the next year, RiskMetrics said.
“Without making a judgment on cost synergies available to the combined entity, we believe that valuation is not compelling,” said RiskMetrics, a unit of MSCI Inc. that advises investment managers such as index funds and mutual funds on how to vote their shares.
Dollar Thrifty shareholders are scheduled to vote on Hertz’s offer Sept. 16. Avis Budget Group Inc. last week raised its rival bid for Tulsa, Oklahoma-based Dollar Thrifty to $1.36 billion without matching the breakup fee offered by Hertz.
Dollar Thrifty fell 36 cents to $47.99 at 11:18 a.m. in New York Stock Exchange composite trading. Hertz, based in Park Ridge, New Jersey, fell 21 cents, or 2.2 percent, to $9.51. Avis, based in Parsippany, New Jersey, fell 22 cents, or 2.1 percent, to $10.19.
To contact the reporter on this story: Mark Clothier in Southfield, Michigan, at mclothier@bloomberg.net.
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