Tags: Dollar | Thrifty | hertz | Bid

Dollar Thrifty Investors Seek Hertz Bid in High $80s

Friday, 24 Aug 2012 10:24 AM

Dollar Thrifty Automotive Group Inc. investors would accept a takeover offer from Hertz Global Holdings Inc. that values the car rental firm at more than $87 per share, or $2.4 billion, several top shareholders told Reuters.

That would be a premium of more than 10 percent over a one-month high of $79.44 for Dollar Thrifty shares, hit on Thursday after Bloomberg News reported Hertz had approached shareholders seeking the price at which they would sell.

Two Dollar Thrifty shareholders said they have been in talks with Hertz for months, part of a takeover dance between the companies that has been going for more than two years.

Dollar Thrifty is the last big prize in an industry that has consolidated rapidly in recent years.

A purchase by Hertz would leave it, Avis Budget Group Inc and privately held Enterprise Holdings controlling about 95 percent of the U.S. car rental market.

Top shareholders who together own about a quarter of Dollar Thrifty told Reuters they wanted an offer from Hertz in the high $80's, or more. All spoke on condition of anonymity.

"My impression from talking to many people, Dollar Thrifty holders are looking for something in the high 80s," said a top 10 shareholder. "$85 wouldn't do the trick for me."

Dollar Thrifty shares hit an all-time high of $84.51 in July.

Another top 10 shareholder said he would not sell his shares for an offer less than $90: "It has to start with a 9."

At $90 per share, an offer would value Dollar Thrifty at $2.5 billion, more than double a $1.2 billion offer Hertz made in April 2010.

A third top 10 shareholder said $88-$89 is an offer he would tender his shares to.

"Some people are expecting into the 90s. Hertz could pay more than $90 and it can still be highly financially attractive," the third shareholder said.

Dollar Thrifty shares jumped 5 percent to $79.44 on Thursday on the New York Stock Exchange, before easing back to $78.23. Hertz shares jumped 5 percent to $13.

It was not clear what price Hertz, which declined comment on Thursday, might be willing to pay for Dollar Thrifty. Its last bid in 2011 was for $66.21 per share.

Dollar Thrifty was not immediately available to comment.

ANTITRUST ISSUES RESOLVED?

Dollar Thrifty earlier this month urged Hertz to put an end to the years of fruitless takeover offers by making a compelling bid to settle the matter once and for all.

Park Ridge, New Jersey-based Hertz has said earlier that it was looking to get antitrust approval from the U.S. Federal Trade Commission before making an offer for Dollar Thrifty.

Investors who spoke to Reuters on Thursday said they believed that the FTC wants to see a deal with Dollar Thrifty before it gives its final approval. Other issues such as the sale of Hertz's Advantage brand have been resolved, they said.

Dollar Thrifty told shareholders in the second week of August that it is in a quiet period, which is unusual as it comes after the company reported results on Aug. 1.

"We are currently in a quiet period and are not talking to investors for the time being. We are reading e-mails, so feel free to share any information you think we need," Dollar Thrifty told shareholders in an e-mail, which was seen by Reuters.

The e-mail sparked fears among the investor community that Dollar Thrifty was looking to do a recapitalization instead of a sale, two shareholders said.

To reassure shareholders, Dollar Thrifty sent another e-mail clarifying that a recapitalization was not in the picture.

"Dollar Thrifty management is currently working on the operations of the business not its capital structure," the e-mail read, according to shareholders who read it to Reuters.

© 2017 Thomson/Reuters. All rights reserved.

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2012-24-24
 

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