Avis raised its offer for Dollar Thrifty to $1.52 billion in cash and stock Thursday, one week before a scheduled vote by shareholders on a bid from rival car rental company Hertz.
The latest offer from Avis values Dollar thrifty at $53 per share, compared with a $50 per-share offer from Hertz.
The rental-car rivals are fighting for control of Dollar Thrifty to gain additional access to vacationers and premium business travelers.
The entire industry has been hammered by a drop-off in business car rentals and that has created a new urgency to capture leisure travelers and others that are still spending money to travel.
Avis' prior offer was worth $1.36 billion and included $40.75 per share in cash, and the same stock portion.
Avis also appealed directly to Dollar Thrifty shareholders, who may decide the company's fate in a matter of days.
"We believe it would be beneficial for Dollar Thrifty shareholders if the Dollar Thrifty Board of Directors engaged in a process to maximize value, rather than letting Hertz dictate timing and process," Avis said in an open letter Thursday.
A larger bid from Avis had been expected ever since Dollar Thrifty Automotive Group Inc. accepted Hertz bid earlier this month. That offer was worth $1.56 billion including restricted stock and stock options and cash of $43.60 per share.
Avis' new offer is worth $1.52 billion per share, based on 28.7 million shares outstanding.
The company boosted the cash portion of its offering by more than $5 per share to $45.79. Both offers include .65 shares of Avis Budget stock.
Dollar Thrifty, headquartered in Tulsa, Okla., scheduled a special shareholders meeting for Sept. 30 to vote on the Hertz offer.
Shares of Dollar Thrifty soared on the news, setting a new 52-week high of $53.
Shares of Avis Budget Group Inc. fell 28 cents or 2.5 percent to $10.74, while shares of Hertz Global Holdings Inc. fell 22 cents, or 2 percent, to $10.65.
Avis said the increased bid was necessary "based on improving fundamentals in the industry and at Dollar Thrifty in particular."
A $44.6 million reverse breakup fee is still in place with Hertz and Avis said it would offer more money if the break-up fee is removed.
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