Avis Budget Buy Payless Car Rental, How Long Until There Are Only 4?

Hi all,

Last week the FTC gave final approval to the Hertz buyout of Dollar and Thriftypayless Rent A Car leaving the U.S. car rental market bossed by just 3 major companies, Enterprise (Alamo and National), Hertz (Dollar and Thrifty) and Avis Budget.

On the peripheral of these major players sits FSNA, who as part of the Hertz ‘s DTAG purchase took ownership of Advantage Rent A Car making them the 4th largest car hire usa company, a title that sounds impressive but in reality still leaves them some way off the top 3.

One of the companies looking to vye for fourth spot was Payless Car Rental, I say was because as of today Payless Car Rental the Florida based car supplier is now part of the Avis Budget group, who have reportedly purchased the mid tier company for $50 million! Not bad for a company that turns over $80 Million a year.

Why have Avis Budget bought this little known company? Well here’s what Ronald L Nelson Chairman & CEO of Avis Budget said;

Payless expands our global footprint, enables us to support Budget’s mid-tier brand positioning, and gives us greater flexibility to capitalize on opportunities in an additional segment of the car rental market in order to help accelerate our growth

Hmmm interesting… I know what it certainly does, and that is bring Avis Budget in line with Hertz in regards to markets it can enter, allow me to explain.

Prestigious aimed at business class and the affluent -  The Hertz brand falls into this category as does Avis.

Mid-Tier aimed at holiday makers - Hertz have Dollar Rent A Car for this and Avis have Budget.

Value Brand aimed at the no thrills market – Hertz could use Thrifty here and now Avis have Payless…

The more interesting part is what will Enterprise do? Their prestige brand is National, their mid-tier brand is Alamo but will they use their own Enterprise brand as a value option?…

Congratulations to Payless car rental as this cash deal seems pretty impressive, from a consumer view, the competitiveness in the  North American market just shrank.

Kind regards,


 car hire USA

Avis Budget Withdraw Bid For Dollar Thrifty Group

Hi all,

Breaking news this evening regarding the Dollar Thrifty Group buy out, and as the title suggests Avis Budget have decided to pull out of the running to take over the Tulsa based USA car rental supplier.

In a regulatory filing, Avis Budget sited “current market conditions” for the decision.

We have made significant progress toward obtaining U.S. regulatory clearance for the acquisition of DTG, and we believe that such regulatory clearance could be obtained. Nonetheless, we have decided not to pursue a transaction at this time in light of current market conditions.”

Avis Budget, who have recently spent £635 million on obtaining Avis Europe, made their offer, a combination of $45.79 in cash and 0.6543 shares of common stock or approximately $1.5 billion in aggregate based on stock prices at the time, back in September 2010.

Hertz came in with their own offer and to date this still stands.

My take on the Dollar Thrifty Buy Out…. and not to blow my own trumpet but…………. I said this would happen ;-)



 Florida car hire

My Take On The Dollar Thrifty Buy Out

Hi all,

As I’ve reported over the past year a couple of companies have lodged official bids to purchase Dollar Rent A Car who also own Thrifty Car Rental. As this process seems to have dragged on I thought it might be a good time to briefly speak about where this deal is right now and what the possible out come could be.

Originally Hertz were the first company to show an interest in purchasing Dollar Thrifty, Hertz required a leisure arm and Dollar Thrifty fit perfectly in to that bracket.  The offer was in the process of being presented to the shareholders when Avis Budget decided to enter in to the bidding. For Avis Budget the purchase would signify a massive boost in market share.

The Avis Budget bid was accepted in principle and both parties handed the details over to the FTC for approval.

The issues with any purchase of Dollar Thrifty with the FTC is, what is best for the customer, does the purchase of one of America’s most successful, and at present cash rich companies, reduce competitiveness within the car rental industry, reducing consumer choice and in doing so push up pricing?

In my opinion the Avis Budget deal would prove very hard to push through, and the amount of time the FTC is taking over deliberating on it seems to back my thinking.

With Dollar Thrifty seemingly preferring the Avis Budget deal, Hertz issued a statement stating they would concentrate on their low cost brand, Advantage Rent A Car…

Then on the 10th May Hertz came back to the party with an improved offer, they also seemed to have a plan on how to win the FTC over by agreeing in principle to sell on their own lesser brand Advantage Rent A Car.

Coincidently Avis Budget agreed a deal to buy out Avis Europe for £635 million practically taking them out of the running to purchase Dollar Thrifty.

Now from where I stand this leaves us with the following senario…

  • Dollar Thrifty want to sell too Hertz but don’t need to.
  • FTC want Hertz to sell Advantage.
  • Hertz wont sell Advantage unless they know they will get Dollar Thrifty.

So we have a bit of a stand off at present… Rumour has it, and its only rumour, is that Fox Rent A  Car could be the company to purchase Advantage Rent A Car, I have no insider knowledge on this, I just saw it on a predominant car rental blog and other sites.

For me, I think Hertz will complete a deal to purchase Dollar Thrifty but I wouldn’t expect a quick sale. Advantage will have to be sold on to make this deal happen and to be fair there aren’t many companies who would have the cash or the know how, so Fox Rent A Car is as good a guess as any.

What’s your take on the this?



 car hire USA

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