The world's largest car rental company Hertz Global Holdings  yesterday said that it will not raise its offer any further for Dollar Thrifty Automotive Group, a day after arch rival Avis Budget Group raised its bid by 12 per cent.

Hertz said that that its merger agreement to acquire Dollar Thrifty at $50.25 amounting to $1.44 billion was its best and final offer.

Although New Jersey-based Hertz declined to top Avis' latest offer, it said that it has confidence that Dollar Thrifty shareholders would approve the merger transaction at their scheduled 30 September 2010 meeting.

Hertz's announcement came after Avis, the world's second-largest car rental company again raised its offer yesterday, 24 September, for Dollar Thrifty, topping an earlier bid from Hertz by 12 per cent to about $1.6 billion. (See: Avis once again tops Hertz offer for Dollar Thrifty by 12 per cent)

But even as Avis is determined to break the merger agreement signed by Hertz with Dollar Thrifty on 25 April 2010 by topping Hertz' offer for the second time, Dollar Thrifty has kept on rejecting Avis' bids on concerns that Avis may not be able to close the transaction on anti-trust issues.

Both the car rental giants have been sparring over Dollar Thrifty since the past six months, when Hertz made the first move on 26 April by offering to buy its smaller rival for $1.17 billion. (See: Hertz Global to take over rival Dollar Thrifty in $1.17 billion deal)

After three months Avis made a counter offer on 29 July of $1.33 billion, which Hertz topped on 11 September with a $1.56 billion bid.

But in the midst of the bidding war, both companies have been simultaneously working on obtaining anti-trust clearance.

However, analysts believe that it would be difficult for Avis to get regulatory approval since it already owns Budget Rent A Car that competes directly with Dollar Thrifty, while approvals for Hertz would be much easier since it operates mainly in the premium market.

Hertz has already put its budget car rental company Advantage Rent-a-Car for sale and said yesterday that it has identified several potential buyers.

Mark Frissora, Hertz's chairman and CEO, said, "Our agreement with Dollar Thrifty provides its shareholders with a substantial premium, deal certainty and a clear path to deal closure by year end. We have anti-trust clearance in Canada, unlike Avis, and our progress with the US government makes us highly confident that we can close the transaction in a timely manner within the framework of our merger agreement.''

Avis operates two globally recognised brands - Avis Rent A Car and Budget Rent A Car. Its operation includes approximately 6,500 car and truck rental locations in the US, Canada, Australia, New Zealand, Latin America, the Caribbean and parts of Asia.

On average, its global rental fleet totaled more than 350,000 vehicles, and completed more than 23 million vehicle rental transactions worldwide in 2009. 

Avis generated revenues of $5.13 billion in 2009. Its Avis, Budget and Budget Truck brands accounted for approximately 61 per cent, 32 per cent and 7 per cent of its revenue respectively.

Dollar Thrifty rents and leases vehicles mainly in the US and Canada under Dollar and the Thrifty brand names in 613 locations, of which 296 outlets are company-owned and 317 franchised. For 2009, the company reported revenues of $1.5 billion and net income of $45 million.