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Avis Signs Agreement to Review Dollar Financial Data

A Thrifty sign at O'Hare International Airport in Chicago
A Thrifty sign stands at O'Hare International Airport in Chicago last month. Photographer: Tim Boyle/Bloomberg

May 6 (Bloomberg) -- Avis Budget Group Inc. will review financial data from Dollar Thrifty Automotive Group Inc., a step toward a possible counteroffer for the rental-car company that accepted a buyout offer from Hertz Global Holdings Inc.

“We expect that we will be given access to all of the due diligence information made available to Hertz and access to Dollar Thrifty management,” Avis Chief Executive Officer Ronald Nelson said today in a letter to Dollar Thrifty. “We are proceeding on the assumption that this confidentiality agreement is identical to the one signed by Hertz.”

Dollar Thrifty granted Parsippany, New Jersey-based Avis access to its books, according to the confidentiality accord, which was disclosed along with the letter in a regulatory filing.

Avis signaled interest in Dollar Thrifty on May 3, a week after at least two Dollar Thrifty stockholders called Hertz’s $41-a-share bid too low. Morgan Stanley will join Citigroup Inc. as an Avis adviser, and the banks will provide financing, two people familiar with the situation said yesterday.

The confidentiality accord contains a clause for a so-called standstill agreement that would impede a hostile bid by Avis for a year, as well as a proviso that this restriction wouldn’t apply under conditions that include the signing of a purchase agreement, according to the filing. Dollar Thrifty has an agreement with Hertz.

Company Responses

Andrew Siegel, an Avis spokesman, and David Reno, a spokesman for Tulsa, Oklahoma-based Dollar Thrifty, declined to comment today on whether the standstill clause is valid.

Hertz CEO Mark Frissora said that while Dollar Thrifty’s board probably would have to consider a “substantially higher” offer from Avis, he is confident that the sales agreement already in place will be completed this year.

“On both financial and regulatory grounds, we believe the Hertz offer is superior,” Frissora told employees today in an e-mail that was released in a regulatory filing. Avis’s Siegel also declined to comment on Frissora’s message.

Hertz’s April 26 agreement to buy Dollar Thrifty consisted of 20 percent in stock and 80 percent in cash. The offer was valued at $1.16 billion based on today’s closing stock price for Park Ridge, New Jersey-based Hertz, according to data compiled by Bloomberg.

Dollar Thrifty fell 12 cents to $50.04 at 4:15 p.m. in New York Stock Exchange composite trading, while Avis slid $1.02, or 7.6 percent, to $12.33. Hertz dropped 70 cents, or 5.4 percent, to $12.38.

Dollar Thrifty Waits

Dollar Thrifty repeated yesterday it’s ready to consider a higher offer from Avis while working to close the Hertz deal.

“You may have read in the press that Avis Budget has stated its intention to make a ‘significantly higher offer’ for the company,” CEO Scott Thompson wrote in an e-mail to employees.

“Our board is prepared to entertain such an offer,” Thompson wrote. “In the meantime, however, we will work to close the proposed Hertz transaction.”

Avis’s Nelson said May 3 that the company “would like to make a substantially higher offer to acquire Dollar Thrifty.” He also has said that Kirkland & Ellis LLP is working as Avis’s legal counsel.

Mary Claire Delaney, a Morgan Stanley spokeswoman, declined to comment yesterday on whether the New York-based company was working with Avis.

To contact the reporter on this story: Serena Saitto in New York at

To contact the editors responsible for this story: Jamie Butters at; Jeff St.Onge at

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