Dollar And Avis/Budget Provide Joint Statement Regarding Takeover

Hi all,

When Dollar Rent A Car decided not to take the Hertz offer and enter in to advanced talks with Budget Rent A Car the stumbling block would always be proving to anti trust regulators that the consumer would be the winner, here is the latest joint statement from Avis/Budget and DTAG (Dollar /Thrifty)

As previously reported, following the termination of Dollar Thrifty’s merger agreement with Hertz Global Holdings Inc., Dollar Thrifty and Avis Budget have been cooperating to pursue antitrust regulatory clearance of a potential acquisition of Dollar Thrifty’s common stock by Avis Budget.

During this period, Avis Budget and Dollar Thrifty have presented to the Federal Trade Commission (“FTC”) a jointly held view that the potential transaction would not reduce competition in the rental car industry. Each believes that intense competition from Enterprise/Alamo/National and Hertz/Advantage, as well as numerous smaller brands, would continue after the proposed transaction. In addition, Avis Budget has expressed the view that a merger with Dollar Thrifty would result in significant cost savings and other operational efficiencies. These synergies and the increased ability of the combined company to compete against other competitors in the marketplace will benefit all rental car consumers, particularly Dollar Thrifty’s core leisure customers.

Avis Budget and Dollar Thrifty believe substantial progress has been made in the discussions with the FTC on these issues, but the FTC’s position with respect to the competitive issues remains uncertain. The two companies have produced millions of pages of documents and provided vast amounts of data to the FTC regarding the car rental industry and their respective businesses as part of a “Second Request” review process. Avis Budget and Dollar Thrifty each have notified the FTC of their intention to certify substantial compliance with the Second Requests on a timetable that would require an official decision from the FTC by the end of March or early April.

As the FTC review process continues, Avis Budget and Dollar Thrifty remain focused on building their individual businesses to drive continued growth and maximize value for shareholders. Dollar Thrifty and Avis Budget reiterate that they have no agreement with respect to any merger or other business combination, and that there can be no assurance that any such transaction (or the terms thereof) can be agreed upon.

Do you think this joint merger will benefit the consumer?

I will of course keep you updated as more information becomes available.

regards,

James

 car hire USA

USA Car Hire Revenue Increase For Alamo, Budget, Dollar and Hertz

Hi all,

Today I have been sent the annual survey of USA car rental fleets, locations and revenue  provided by Auto Rental News.

The U.S. Car Hire industry is set to report a combined industry revenue of over 20 billion dollars up on 2009 figures.

The impressive point to this stat is that this year’s revenue total will be achieved with a smaller rental fleet, bringing average revenue per unit to $1,051 per month, a record high.

Alamo Car Hire

Alamo Rent A Car including Enterprise Rent A Car and National Rent A Car have an estimated 850,689 rental cars in service in the USA today covering 6178 locations. Last year’s total revenue was estimated at $9.5 Billion, this years revenue see’s an estimated increase to $9.8 Billion.

Budget Car Hire

Budget Rent A Car including Avis have an estimated 270,000 rental cars in the USA servicing 2100 locations. Last year’s total revenue was estimated at $4 Billion, this years revenue see’s an estimated decrease to $3.85 Billion.

Dollar Rent A Car

Dollar Rent A Car including Thrifty Rent A Car have an estimated 108,000 USA Hire Cars on the road spread out among 464 locations. Last year’s total revenue was estimated at $1.467 Billion, this years revenue see’s an estimated increase to $1.54 Billion.

Hertz Car Hire

Hertz Rent A Car including Advantage Rent A Car have an estimated 290,000 rental cars in the USA servicing 2300 locations. Last year’s total revenue was estimated at $3.95 Billion, this years revenue see’s an estimated decrease to $4.158 Billion.

Totals

Based on all the estimates there are 1,629,561 Rental Cars servicing 17,254 separate USA pick up points earning an estimated $20.551 Billion for 2010!

I am n0t entirely sure if these figures include the buoyant second hand car sales market, but the figures are an encouraging sign that the car rental industry is back on a secure foundation after what has been an extremely difficult few years.

Regards,

James,

 car hire USA

Avis Budget’s Response To Hertz’s Comments Over Dollar Thrifty


Hi all,

Interesting statement from Avis Budget today -

Hertz has today stated that if the Dollar Thrifty stockholders reject the Hertz merger, Hertz will end all efforts to acquire Dollar Thrifty.  Based on this commitment, Avis Budget is now prepared to agree to pay a reverse termination fee of $20 million in a merger agreement with Dollar Thrifty.  Avis Budget has always said that as long as Hertz had matching rights, Avis Budget would not consider a reverse termination fee.  Now that Hertz has in effect eliminated those matching rights, Avis Budget is prepared to offer such fee.
 
If Dollar Thrifty stockholders do not approve the Hertz transaction at the special meeting tomorrow:
 
1. Avis Budget will continue to actively pursue the acquisition of Dollar Thrifty, including commencing an exchange offer at our recent offer price no later than 10 business days after the meeting.  Such offer will be subject only to the conditions in the merger agreement previously provided (as adjusted for an exchange offer structure with a minimum tender condition, for modification of credit agreements, and to assure that Hertz honors the commitments made in its statement earlier today) and the Dollar Thrifty disclosure schedules previously delivered to us.
2. Avis Budget will continue to actively pursue antitrust clearance.  As previously disclosed, Avis Budget has committed to sell assets representing $325 million of revenues (of which not more than $250 million are U.S.), demonstrating our commitment to attaining antitrust approval.
3. Avis Budget will commit to sign the merger agreement previously provided, with an additional provision to assure that Hertz honors the commitments made in its statement.
4. In light of continuing questions related to reverse termination fees, Avis Budget will agree to pay a $20 million reverse termination fee in the merger agreement with Dollar Thrifty.

Who will win the battle…

regards,

James

 car hire USA

Budget Car Hire Increases Dollar Car Rental Bid

The battle for ownership of Dollar Rent A Car took another turn last night ascarental Avis Budget returned with an improved offer. Back in August I blogged about how Dollar had declined Budgets initial advances and how Hertz looked favourite to purchase Dollar.

However Budget has returned with an improved offer of around $1.36 Billion for the Tulsa based car rental giant. The cash portion of the Avis offer for Dollar Thrifty has been raised from $39.25 to $40.75 per share.

“We are confident that the Dollar Thrifty shareholders will prefer the premium Avis Budget offer to the Hertz offer,” Avis Budget stated.

The improved offer may still be shunned due to the opposition the deal might encounter via antitrust regulations.

Dollar Thrifty shareholders are due to attend a special meeting on September 16 to consider the Hertz offer.

“In the event that the Hertz transaction is rejected by the special meeting, we will commit to sign the merger agreement we previously delivered to Dollar Thrifty at any time within five days of that meeting,” Avis Budget said.

It’s clear that whoever completes the deal will have increased their market share and obtained the only USA Car Rental supplier to make a profit in 2009.

Will keep you all posted.

Regards,

James

 car hire USA

Dollar Thrifty Politely Decline Avis Budget Offer

Hi all,

I reported last week about the Budget Avis Group making a counter offer for Dollar Thrifty, the offer they made was more than the orginal offer made by Hertz. However last night the offer was rejected by Dollar Thrifty in favour of the lesser Hertz offer.dollarrentacar

The reason behind this from the Hertz point of view is that they believe their offer will have less objections from regulators due to the fact that their presence on airport is less than Avis Budget.

However from what I understand Dollar Thrifty are concerned that Avis Budget are not willing to enter in to a “reverse termination fee” where if Avis Budget were unable to or pulled out of the deal, Dollar Thrifty would be compensated. Hertz have agreed to this clause.

From what I have read, if Avis Budget agree to this addition the deal could be on.

I wait for the next instalment of the latest car hire soap opera.

Regards,

James,

U.S. Rent A Car.co.uk

 car hire USA

Avis Budget Enter Bidding For Dollar Thrifty Car Hire

Last night the Avis Budget Group entered in to the bidding for Dollar Thrifty, with a whooping bid of$ 1.33 Billion, this trumps the earlier Hertz bid of $1.17 Billion.dollarthrifty

A letter sent to Dollar Thrifty’s top bosses from Avis Budget’s group chairman and CEO Ronald Nelson stated: “We are prepared to put forward an offer today for Dollar Thrifty that clearly constitutes a superior proposal under that [Hertz] merger agreement.”

He continued: “We are prepared to enter into a merger agreement that contains substantially the same terms as the Hertz merger agreement, but which includes removing the matching rights, eliminating the break-up fees, and increasing the commitment to secure antitrust approvals.

“In short, we believe that the higher purchase price we are offering, combined with the terms of our proposed merger agreement, makes our offer a superior one from the perspective of Dollar Thrifty and its shareholders.”

Whomever manages to purchase Dollar Thrifty will decrease the huge advantage Enterprise owned Alamo Rent A Car have on the U.S. market at present.

For those clever bosses at Dollar Thrifty who took shares in the company rather than performance related bonuses must be very happy at the moment.

Who would you rather see take over at Dollar Thrifty?

 car hire USA

My week in Car Hire, Alamo, Avis, Budget, Babies, Upgrades and Reviews

Hi All,

Hope you are all well.

This week has been a very long, tiring but interesting week. On a personal note my third son is teething! So he’s decided to keep my sleep down to a minimum, bless him!!

On the professional front we’ve had meetings with Budget, Avis and Alamo. We’ve seen a sneak preview of the U.S. Rent A Car booking engine upgrade and?partnered up with a start up review site.

Budget Meeting

The budget meeting as far as I’m concerned went well. As we sort of guessed already prices will be going up for next year, the actual rise will probably be proportionate to the q3 results that are due around the 03/11/09, however we are thinking between a?5-8% rise. The rise is very much to do with the interest rate now being charged to Budget for re-financing, believed to be around 9% an increase of roughly 6% allegedly.

We raised our concerns regarding how budget staff are selling their “toll passes” to customers and?hope the message has got through.?Feedback from customers tells us that staffs have been including the pass automatically in the hire car and then charging locally once the customer signs the agreement. Not something we are very impressed about.

Avis

The positive outcome of this meeting was that we now have Avis at Orlando International Airport to offer. Avis consider themselves (probably rightfully) to be a premium product and so rates reflect this, however so does the service.

Alamo

Alamo confirmed that there will definitely be a price increase next year of 8% across the board. Their justification for the increase is that they are the only car rental company who is not hanging on to their fleet for another year, so in theory if you rent an Alamo car you will be guaranteed a vehicle of no more than 6/8 months old, rather than over a year as with others.

We also spoke about speeding up the process once you guys get to the U.S. and hopefully we have stumbled upon a solution, I’ll tell you more once we’ve signed some documents.

U.S. Rent A Car Booking Engine

Frank (Business Development) and I,?got a sneak preview from the IT guys of the booking engine upgrade this week. The resulting effort seems to make the engine a lot quicker and slicker. We also managed to brain storm a few new ideas to freshen up the engine and perhaps innovate again within the industry.

The car rental industry is very slow to innovate; I still can’t believe we are the only company to include user generated reviews on our site. Which leads nicely too…..

Partnered up with review site

This week we launched inconjuncation with www.rentacars.co.uk the largest car hire opinion and review site in the UK.

At present it has over 10k unique reviews, the site is in its infancy and I would predict it will probably change again at some point but we are hoping it could become the trip advisor of car hire… wishful thinking perhaps…

World Travel Market (WTM) draws nearer and I?m very lucky to be attending the Travel BlogCamp (@tbcamp on twitter) hosted by Darren Cronian of Travel Rants fame. The list of attendee?s is very impressive and although I usually dread WTM I?m actually looking forward to it this year.

That?s it for this week, have a good weekend and a happy Halloween.

?

Regards,

?

Gavin,

U.S. Rent A Car.co.uk

@gavinboswell


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