Avis to Outbid Hertz for Dollar Thrifty

The car-rental war is heating up in the US, after in the end of April a deal between Dollar Thrifty Auto Group and Hertz Global Holdings was regarded as a done deal. Rival Avis Budget Group announced today it is preparing a killer-bid for Dollar Thrifty, adding that the company sold itself to cheap to Hertz.

"We would like to make a substantially higher offer to acquire Dollar Thrifty, especially in light of your recent performance," Avis CEO Ronald Nelson wrote in a letter to Dollar Thrifty, cited by MSNBC.

Hertz offered $41 per share last month, amounting to a total value of $1.2 billion, 80 percent of which to be paid in cash. Avis' move sent Dollar Thrifty's shares flying to a three-year high, n upward trend supported by the record first-quarter profit ($27.3 million) reported by the company.

"It is hard to understand how your failure to engage in discussions with an interested strategic buyer, who you know also would be able to achieve significant synergies as a result of a combination, can be consistent with the fiduciary duties that you and your board carry to seek the best possible deal for your shareholders," Nelson continued in the letter.

If the deal stays as is, and Hertz acquires Dollar Thrifty, it will give Hertz a network of 9,800 locations and four rental brands: Hertz, Advantage, Dollar and Thrifty.