It’s over. The on-again, off-again battle between Hertz and Avis Budget to buy Dollar Thrifty has effectively ended, given Avis' decision to spend a billion dollars in cash to buy Avis Europe.
The decision comes a couple of weeks after Avis received a divestiture proposal from the Federal Trade Commission for a potential acquisition of DTG that while tough, was seen as “manageable” by its advisors.
Instead of moving ahead to compete with Hertz’s current $72 bid for DTG, Avis CEO instead began negotiations with his counterpart at Avis Europe in mid-May (keeping his bankers out of the loop until only a few days ago) and wound up with the current deal to pay a roughly 60 percent premium for Avis Europe.
While bankers tell me Avis could have moved ahead with a fully financed bid for DTG in the low $80s, ultimately the fear that Hertz would simply best that offer coupled with the FTC divestiture proposal convinced Avis CEO the company’s money was better spent elsewhere.
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