Dollar Thrifty shareholders reject Hertz $1.44-bn takeover offer

Shareholders of the US-based low cost car rental company Dollar Thrifty Automotive Group, yesterday rejected Hertz Global Holdings' $1.44 billion takeover after arch rival Avis Budget Group offered a $20 million reverse break-up fee just hours prior to the shareholders' meet.

Fifty-four per cent of Dollar Thrifty shareholders voted against Hertz's bid, which had offered $50.25 per share-nearly $3 lower to Avis' offer of $53 per share.

Hertz's offer had a $44.6 million reverse termination fee if the deal did not secure antitrust approval from the Federal Trade Commission and Avis had consistently refused to add a termination fee as it was apprehensive that its transaction may not get regulatory approval.

But by once again topping Hertz' latest offer of $1.44 billion offer by 12 per cent to about $1.6 billion on 24 September, (See: Avis once again tops Hertz offer for Dollar Thrifty by 12 per cent) and adding a $20-million reverse break-up fee just hours prior to Dollar Thrifty shareholders meet, Avis was able to swing the vote in its favour.

Hertz, the world's largest car rental company had said last week that it would not raise its offer any further for Dollar Thrifty and maintained that its offer was superior to that of Avis, which did not have a break up fee. (See: Hertz says no to higher bid for Dollar Thrifty)

It also cautioned the board of Dollar Thrifty that it would be difficult for Avis to conclude the deal due to regulatory concerns.