Hertz Global to take over rival Dollar Thrifty in $1.17 billion deal
26 Apr 2010
Hertz Global Holdings (HTZ), the world's largest car rental company, said it has agreed to take over rival Dollar Thrifty Automotive Group (DTG) for about $1.17 billion in cash and stock.
With the deal, Hertz said it would get another 1,550 locations, boosting its total to 9,800. This, the company said, would boost its leisure rental business in Europe and elsewhere.
Hertz said the bid valued Dollar Thrifty at $41 per share, a 5.5 per cent premium to Friday's closing price of $38.85.
The offer would be 80 per cent cash and 20 per cent Hertz stock.
The closing of the deal would see Hertz become a wholly owned unit of Hertz and the Park Ridge, NJ-based company expects the deal to contribute to profits immediately. It said it had already identified at least $180 million in potential cost cuts from the combination of the two businesses.
Hertz is separately reporting a smaller loss for the first quarter, which is $150.4 million or 37 cents per share as against $163.5 million, or 51 cents per share, a year ago. One time costs apart, Hertz said it lost 12 cents per share even as revenue rose 6 per cent to $1.66 billion from $1.56 billion.
Hertz said US rental car revenue surged on higher prices, business travel increase as also better results for its Advantage leisure brand.
Hertz is looking at adjusted profit of 43 cents to 45 cents per share in 2010, on $7.5 billion to $7.7 billion in revenue as against its forecast of a 37 cents to 39 cents profit per share excluding one-time items, on $7.4 billion to $7.6 billion in revenue.
