Hertz Said to Be Close to Buying Dollar Thrifty
Hertz Global Holdings is near a deal to acquire the Dollar Thrifty Automotive Group for nearly $2.5 billion, according to a person briefed on the transaction, ending a fierce and protracted merger battle among the nation's largest car rental companies.
Under terms of the deal, which could be announced Monday, Hertz would pay $87.50 a share for Dollar Thrifty, according to this person, who spoke on condition of anonymity.
That would be a premium of about 7.5 percent to Dollar Thrifty's current share price. On Friday, shares of Dollar Thrifty, which is based in Tulsa, Okla., rose $1.32, or 1.7 percent, to $81.
Hertz, based in Park Ridge, N.J., has been pursuing Dollar Thrifty for more than two years.
The merger talks remain fluid and the deal could still fall apart, the individual briefed on the talks said. Discussions are expected to continue through the weekend.
Spokesmen for the two companies were not immediately available for comment.
A Hertz-Dollar Thrifty combination would end a merger battle in which the Avis Budget Group also tried to acquire Dollar Thrifty.
In 2010, Hertz tried to buy the company for $1.2 billion, but Dollar Thrifty shareholders rejected the bid. Hertz came back to the negotiating table this year as Dollar Thrifty's financial results sharply improved.
Hertz's performance has also been strong. Its stock, which has a market value of about $5.5 billion, has risen about 50 percent since October.
A deal in the rapidly consolidating rental car industry could raise concerns among antitrust regulators. To preemptively address those concerns, Hertz has said it was seeking approval from the Federal Trade Commission in Washington before striking a deal with Dollar Thrifty.
Both Hertz and Thrifty were once owned by the Detroit automakers. Ford owned Hertz and spun the unit off in a 2005 initial public offering. That same year it was acquired by a private equity consortium led by the Carlyle Group. In 2006, the private equity group again took Hertz public.
Chrysler once owned Thrifty and, in 1990, combined it with Dollar Rent A Car. The joint company was spun off in 1997.