Hertz raises offer to $1.56 billion to top Avis’s bid for Dollar Thrifty

Hertz Global Holdings, the world's largest car rental company, yesterday raised its offer for smaller rival Dollar Thrifty Automotive Group to $1.56 billion, topping the $1.33 billion offer made by Avis Budget Group Inc.

New Jersey-based Hertz is now offering $50.00 per share, consisting of $43.60 in cash and 0.6366 of a share of Hertz common stock. The revised price represents an increase of $10.80 per share in the cash component of the offer.

The revised offer values the Oklahoma-based Dollar Thrifty at $1.56 billion and Hertz said that other key provisions of the original merger agreement are unchanged, including a $44.6 million reverse termination fee payable to Dollar Thrifty if required antitrust clearance is not obtained.

"We believe a combination of our companies is in the best interest of our respective stakeholders. Our companies will work together to secure a favorable shareholder vote as soon as possible and to ensure a smooth transition for our organizations after deal closure,'' said Mark Frissora, Hertz's chairman and CEO and Thomas Capo, the company's chairman of the board.

On 26 April Hertz offered to buy Dollar Thrifty for about $1.17 billion in cash and stock and said that the merger would bring in synergies of at least $180 million. (See: Hertz Global to take over rival Dollar Thrifty in $1.17 billion deal)

Two months later, Avis, the second largest US car rental company, made a counter-bid of $1.33 billion and offered to enter into a merger agreement on same terms as the Hertz proposal, but which includes removing the matching rights, eliminating the break-up fees, and increasing the commitment to secure antitrust approvals. (See: Avis outbids Hertz for Dollar Thrifty with $1.33 billion offer)