Dunn Lambert, LLC
We mean business
Comprehensive legal services for businesses in New Jersey and New York call 201-957-0874
Dunn Lambert, LLC
comprehensive legal services for businesses call 201-957-0874

Next Steps in the Dollar Thrifty Bidding War

Detailed and interesting commentary by The Deal Professor, Steven M. Davidoff, recently appeared in The New York Times' DealBook section on Mergers & Acquisitions regarding the bidding war for Dollar Thrifty, which has been discussed in previous posts.

Davidoff breaks down the stakes in the competition between New Jersey-based companies Avis Budget Group and Hertz Global Holdings over Dollar Thrifty Automotive Group. Late last month, Avis's chief executive sent an offer letter to Dollar Thrifty, saying Avis was offering a "superior proposal" for a merger with Dollar Thrifty. Davidoff looks at the language of the offer letter and outlines the main points of Avis' proposal, how it differs from Hertz's proposal (from last April), and what are the expected next steps in the competition for a Dollar Thrifty merger deal.

The most interesting aspect of Avis's offer, according to Davidoff, is that Avis's proposal does not include matching rights or break-up fees, and says it increases "the commitment to secure antitrust approvals." Davidoff explains that Avis is attempting to push Hertz into eliminating matching rights and break-up fees if it comes back with a counter-bid.

Davidoff says that the next steps will be for the Dollar Thrifty Board to determine whether the Avis proposal is actually a "superior proposal." If it decides that it is, the Dollar Thrifty Board must then provide two business days' notice to Hertz before it can terminate the Hertz agreement and go with the Avis proposal. During those two days, Hertz's matching rights allow that it must be given the chance to outbid Avis.

If Hertz does not make a superior proposal in that time, Dollar Thrifty would pay the termination fee and expenses total of $49 million to Hertz and accept the Avis proposal. Avis's strategy in the merger competition is to eliminate the matching rights and termination fees in their proposal in the hope that Hertz will have to eliminate these conditions in any counter-bid in order to make a superior proposal. Avis is trying to gain a foothold in the competition in this way. It is yet to be seen how Hertz will respond.



Avis Goes to War for Dollar Thrifty (DealBook, The New York Times)

No Comments

Leave a comment
Comment Information

Office Location

Dunn Lambert, LLC
East 80 Route 4 Suite 170
Paramus, NJ 07652

Paramus Law Office Map

Dunn Lambert, LLC
1745 Broadway, 17th Floor
New York, NY 10019
New York Law Office Map
Phone: 201-957-0874
Fax: 201-291-0140
Telephone: 212-768-0700
Fax: 212-519-9804
Best Lawyers | Best Law Firms | U.S.News & world report | 2016

GET ANSWERS from a firm
with a sense of business.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Review US
Subscribe to This Blog's Feed FindLaw Network