Avis quits race for Dollar Thrifty - Car Rental News
Avis quits race for Dollar Thrifty
Car Rental News - 19/09/2011
Hertz is now the sole bidder for Dollar Thrifty, after Hertz said it was no longer interested.
The long-running battle for control of car rental firm Dollar Thrifty appears to have entered the final round, after Avis Budget Group announced that it was pulling out of the bidding for the smaller firm. The move leaves Hertz Global Holdings the only company bidding to take over Dollar Thrifty.
News of the announcement saw Hertz shares on the NYSE rise more than 12 per cent, to $11.25. Shares in Avis, traded on the Nasdaq, were up by more than 5 per cent, reaching $12.34 apiece.
According to reports, Avis dropped plans to buyout Dollar Thrifty because market volatility recently makes it much harder and more expensive to raise funding. Avis recently went to the markets to help fund its billion-dollar acquisition of Avis Europe.
A regulatory filing shows that Avis has total debts of some $10.1 billion, including financing for Avis Europe. Hertz will also need to raise money to finance its acquisition of Dollar Thrifty. Hertz currently has liabilities totalling nearly $16.2 billion.
For more than one year, Hertz and Avis have been locked in a bidding war for Dollar Thrifty. The car hire industry faces increasing consolidation pressures and both suitors were holding separate talks with authorities aimed at gaining antitrust approval.
The news led to shares in Dollar Thrifty sagging, as investors see Hertz less likely to make a more lucrative offer. Dollar Thrifty’s share price fell 3 per cent, to $62.29.