Hertz Extends FTC Deadline on Dollar Thrifty Deal
Hertz Global Holdings Inc. (HTZ), which has tried to acquire Dollar Thrifty Automotive Group Inc. (DTG) for half a decade, agreed to extend the deadline for the Federal Trade Commission to rule on the $2.6 billion acquisition.
The deadline was extended to Nov. 16 from Oct. 31 because the FTC hasn’t finished reviewing information provided by the companies, Hertz said in a statement.
The $87.50-a-share offer represents an 8 percent premium to Dollar Thrifty’s closing price of $81 on Aug. 24. The price is more than twice the $41-a-share Hertz offered in April 2010. Hertz wants to buy Dollar Thrifty to secure its place as the No. 2 player in the U.S. market.
Chief Executive Officer Mark Frissora’s pending acquisition of Dollar Thrifty may be the last combination of major U.S. car rental companies able to obtain regulatory approval. Hertz, Enterprise Rent-A-Car and Avis Budget Group Inc. (CAR) together control about 75 percent of the market, with Dollar Thrifty at 5 percent, according to a February report from IBISWorld. No other competitor holds more than 1 percent, IBISWorld said.
As part of the Dollar Thrifty acquisition, Hertz agreed to sell its Advantage brand to appease FTC concerns that Hertz would gain too much of the leisure market. The Dollar and Thrifty brands compete with Advantage on the budget end of the leisure car-rental market.
Hertz began its pursuit of Tulsa, Oklahoma-based Dollar Thrifty in April 2007 and made a formal bid in 2010 of about $1.2 billion that Dollar Thrifty shareholders rejected. Park Ridge, New Jersey-based Hertz made another offer last year that it later withdrew, citing market conditions.
Hertz fell 0.5 percent to $14.73 at the close in New York. Dollar Thrifty declined 2 percent to $85.11.
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