Hertz to Buy Dollar Thrifty

In what is to become one of the most important deals in the car-rental sectors in the United States, Dollar Thrifty Auto Group and Hertz Global Holdings agreed on a buyout, at a price of $41 per share. According to MarketWatch, Dollar Thrifty was worth on December 31 $1.13 billion, while Hertz bid $12. billion, 80 percent of it in cash.

"Together we will be able to compete even more effectively and efficiently against other multi-brand car-rental companies, offering customers a full range of rental options in the U.S.," Mark Frissora, Hertz CEO said in a statement.

As a result of the announcement, stocks of both companies climbed to record levels: Hertz shares increased by 14 percent (the highest value since February 2008.

"This gives them a four-brand strategy, which should give them an advantage competitively and allow them to share one back office and an opportunity to share fleet," John Healy, an analyst at Northcoast Research Holdings in Cleveland told The Denver Post. "It seems to be very beneficial for Hertz shareholders."

The offer made by Hertz displeased the third largest bidder for Dollar Thrifty, Citadel Investment, which calls the deal a "complete steal."

According to The New York Times, the deal, if approved, will give Hertz a network of 9,800 locations and four rental brands: Hertz, Advantage, Dollar and Thrifty.

"This adds a midlevel brand that should supplement the high-price and status brand of Hertz," Bob Mc Adoo, a senior analyst at Nashville, Tenn.-based Avondale Partners told The Denver Post.