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Hi all,

The soap opera that has become the race to purchase Dollar/Thrifty took another turn yesterday when Hertz re-entered the race with an equity bid of $2.2 Billion. The offer is based on Hertz’s May 6th stock price of around $72 total per share.

Hertz’s ambitious plans for discount brand, Advantage Rent A Car could be shelved to help gain approval from the FTC which appears to have been a stumbling block for the Avis/Budget offer.

A Hertz spokesman stated that the next steps would be

we will complete the divestiture of Advantage and work toward FTC approval. We will enter into discussions with Dollar Thrifty to reach a consensual deal and look to secure support of Dollar Thrifty shareholders.

Hertz new offer eclipse’s its previous offer by 26% and Budgets by 24%, Hertz stated that improved conditions within the market place, driven by a buoyant second hand market has resulted in the improved offer.

It will be very interesting to see where this saga goes and the FTC ruling regarding Avis/Budgets proposed purchase of Dollar/Thrifty will have a massive bearing, the outcome of this is already a month overdue.

Who will benefit more from the purchase, Hertz, Avis/Budget or the consumer?

regards,

James

Hi all,

Just to keep you updated on the soap like episodes of the on going saga of car rental giant Avis Budget Rent A Car‘s proposed purchase of Dollar Rent A Car.

In the past we have seen Dollar share holders reject a very strong looking Hertz bid in favour of the seemingly more lucrative but a trickier to complete Budget deal.

Avis Budget hope to get clarification from the U.S. Federal Regulators within the next two weeks.

Our discussions with the U.S. Federal Trade Commission (FTC) have been very constructive, although we are not yet at a point of resolution,” Avis’ CEO Ronald Nelson said on a quarterly earnings conference call with analysts.

The potential problems for the deal surround Avis’s  ownership of low cost brand Budget Rent A Car, who already compete against Dollar and Thrifty in many of the same markets.

Experts state that the sale of Dollar to Avis could leave the consumer worse off as the USA Car Hire market  is predominately fought by 4 major brands, Alamo Rent A Car (Enterprise), Hertz, Avis/Budget and Dollar/Thrifty, so the sale would give the customer less choice.

The next couple of weeks are very important to Avis/Budget, I will keep you posted with any new developments.

regards,

James