Avis Gets Manageable Solution for Dollar Thrifty Bid

After months of negotiations and delay, Avis BudgetGroup has finally received specifics from the Federal Trade Commission about what it must do in order to move ahead with any purchase of Dollar Thrifty Automotive Group.

Avis auto rental kiosk
Photo: Michael Gray
Avis auto rental kiosk

The response from the FTC was received late last week and I am told by people familiar with the situation that it is seen as “manageable” by Avis...meaning that from an economic standpoint Avis could comply with what the FTC is asking for and move ahead with a bid for Dollar Thrifty that would counter the cash and stock bid from Hertz currently worth $70.70 a DTG share.

At present Avis and its advisors are reviewing the FTC’s response, which included specifics of divestitures and trying to determine the exact economic consequence of those requests and what if any of them might still be challenged.

Given the FTC’s requests are seen as manageable, Avis is seen as likely to proceed with a counter-bid in the next few weeks. However, sources cautioned that such a move has not yet been decided. If Avis does decide to move ahead with another bid, while it would create a highly leveraged company, it is seen as financeable.

Shares of Dollar Thrifty are trading well above the price Hertz bid for the company as investors awaited the FTC response to Avis.

Hertz has said it is confident it can gain regulatory approval for its deal.

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