Avis Tops Hertz's Offer for Dollar Thrifty

Back in April, the rental business in the US was bracing for what was supposed to become the most important deal in the car-rental sectors ever made in the country: the purchase of Dollar Thrifty Auto Group by Hertz Global Holdings. To that end, agreements were made, hands were shaken and talk of the $1.2 billion to be paid by Hertz was all around.

Enter Hertz's rival, Avis Budget Group, who joined the race for Dollar a bit late, but managed to catch up fast. Really fast. Until this week, when it left Hertz in its dust, bidding $1.33 billion. More than Hertz's offer, less than Dollar's real value.

"We are prepared to enter into a merger agreement that contains substantially the same terms as the Hertz merger agreement, but which includes removing the matching rights, eliminating the break-up fees, and increasing the commitment to secure antitrust approvals,” Avis told Dollar in a letter cited by Autonews.

Avis is offering $46.50 a share, while Hertz only $39.86. A price which, together with the terms of the proposed merger are enough, Avis believes, to secure the hearts and minds of Dollar's management.

“We continue to believe that a combination with Avis Budget presents a compelling opportunity for our respective stakeholders and the prospect for your shareholders to obtain the highest value for their investment,” the letter read.

According to the industry data, this insane battle for Dollar is being fueled by the fact that the rental industry has remained largely unaffected by the economic crisis. Who ever takes Dollar will become one of the biggest players in the industry.