March 3, 2021

DealBook: Dollar Thrifty Asks for ‘Best and Final’ Bids From Suitors

9:19 p.m. | Updated

The Dollar Thrifty Automotive Group sent a letter to Hertz Global Holdings and the Avis Budget Group on Sunday requesting “best and final” takeover offers.

The letter from Dollar Thrifty is meant to bring a protracted battle for the car rental company to a close within a matter of months, though that will also depend on either takeover offer receiving antitrust approval because all three companies are in the rental car business.

Hertz has the higher bid on the table, with a cash-and-stock offer worth $1.91 billion at the close of trading on Friday. Dollar Thrifty shareholders rejected a previous Hertz takeover bid last fall.

Avis’s most recent proposal, worth $1.55 billion as of Friday’s close, was announced last fall. But many investors and analysts have been unsure of Avis’s intentions, especially given its $1 billion purchase of its former European arm in June.

In his letter to Avis and Hertz, Dollar Thrifty’s chief executive, Scott L. Thompson, wrote that he believed a merger with either company would probably meet approval by regulators.

Mr. Thompson added the caveat that any proposal requiring his company’s shareholders to assume any antitrust risk, like with a breakup fee, would most likely be deemed unacceptable by Dollar Thrifty’s board or shareholders.

“Both companies over a multiyear period have made unsolicited offers,” Mr. Thompson said in an interview on Sunday. “It seems logical to bring this to a conclusion.”

He added that Dollar Thrifty had spent more than $30 million over the past four years responding to the unsolicited offers.

The goal is to finally run a formal sales process in October, one that Mr. Thompson said might draw out other bidders. But thus far, no other companies have emerged.

A person close to Hertz said that so long as the Federal Trade Commission had yet to sign off on the company’s bid, “nothing has changed.” Among the steps Hertz is taking to win approval from the regulator is selling off its Advantage brand.

Shares in Dollar Thrifty closed on Friday at $61.91, giving it a market value of $1.79 billion. Its shares have risen 31 percent this year.

Representatives of Hertz and Avis declined to comment or were not immediately available for comment.

Dollar Thrifty has improved its financial performance since Mr. Thompson and his management team took over in 2008, including by cutting its management ranks and other costs. The company also expanded its fleet providers beyond Chrysler, adding companies including Ford, Nissan and General Motors.

The company has set a target of $270 million to $290 million in adjusted earnings for this year. It also expects to eliminate its corporate debt load and to have up to $600 million in unrestricted cash holdings.

This post is a longer version of the article that appeared in print.

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