Dollar Thrifty exec rebuffs Avis Budget bid, will review modifications

Dollar Thrifty rebuffs Avis Budget bid

TULSA, Okla. — Dollar Thrifty Automotive Group Inc. rebuffed a counteroffer from Avis Budget Group Inc. on Tuesday afternoon, saying it would continue with a competing acquisition bid by Hertz Global Holdings Inc.

But in a letter to Avis Budget, executives at Dollar Thrifty didn’t shut the door on talks with its suitor, either.

“We stand ready to review and consider any modifications you may wish to make to your proposal,” Dollar Thrifty President and CEO Scott L. Thompson wrote in his letter to the head of Avis Budget.

Dollar Thrifty acknowledged Tuesday that the Avis Budget bid offers its shareholders more money and that the company would be able to obtain financing for the deal — two things needed for the company to legally break its agreement with Hertz.

Instead, at issue are lingering concerns that Avis Budget’s $1.33 billion cash-and-stock offer might not win the approval of antitrust regulators, and unwillingness from Avis Budget to offer a so-called “reverse termination fee.”

“Indeed, Avis Budget’s unwillingness to offer a meaningful reverse termination fee can only represent to us, to the market and to any objective observer a lack of confidence by Avis Budget in its position,” Thompson wrote.

Avis Budget, which is headquartered in Parsippany, N.J., declined to comment. It made its offer last Wednesday.

The letter is the latest development in the ongoing feud between Hertz and Avis Budget, who both hoping to own Dollar Thrifty and its rental car business that’s popular with vacationers.

Hertz, which made a $1.17 billion bid for Dollar Thrifty in April, has said its bid would face fewer regulatory hurdles than an Avis offer because Hertz doesn’t operate a “value” brand such as Budget — that’s the niche Hertz hopes to fill with Dollar Thrifty. It’s already received the signoff from regulators in Canada.

Executives at Hertz, which is based in Park Ridge, N.J., have also said Avis and other rivals have a higher share of U.S. airport rentals than Hertz.

Based in Tulsa, Okla., Dollar Thrifty is planning a special shareholders meeting in mid-September so its stockholders can vote on Hertz’s bid.

Regardless of who ultimately acquires Dollar Thrifty, the expanded company will have to compete in an increasingly consolidated rental car market full of customers hoping to rent wheels for as little as possible.

Dollar Thrifty shares fell 67 cents, or 1.3 percent, to $50.17 in trading Tuesday, while Avis Budget’s stock fell 21 cents, or 1.7 percent, to $12.42. Hertz shares fell 38 cents, or 3.2 percent, to $11.57.