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Bidding War Has Begun for a Dollar Thrifty Merger

Dollar Thrifty Automotive Group Inc. is currently considering a $1.33 billion counter-offer to merge with Parsippany, New Jersey-based Avis Budget Group Inc. In April, Park Ridge, New Jersey-based Hertz Global Holdings Inc. offered $41 a share in cash and stock for Dollar Thrifty, or 1.17 billion.

Late last month, Avis attempted to out-bid Hertz, offering $46.50 a share. Dollar Thrifty said that it received the offer and will consider it, but that it already signed a definitive merger agreement with Hertz.

Experts in the field say that Dollar Thrifty has managed to make itself a sought-after asset through solid business decisions. Hertz earlier said that it wished to merge with Avis in order to expand its offerings to vacationers renting in airports.

Avis Budget’s CEO and chairman said in a letter that he believed his company’s offer was better than Hertz’s offer because of the higher purchase price and because his company’s offer includes less restrictions in the terms of the merger agreement.

According to The Associated Press, Avis had been upset that Dollar Thrifty had not contacted them about a rival bid before moving ahead with Hertz. Avis also accused Dollar Thrifty of discouraging competing bids by setting high breakup fees.

Before any bid for a merger wins completely, government antitrust regulators will have to give the deal the go-ahead.

Sources:

Avis Budget Offers $1.33 Billion for Dollar Thrifty (Bloomberg)

Avis makes $1.33B bid for Dollar Thrifty (The Associated Press)

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