Avis Budget Group has launched what could become a protracted bidding war for car rental firm Dollar Thrifty with an unsolicited $1.33 billion offer.
The figure trumps a $1.2 billion cash and shares offer made by rival Hertz earlier this year.
The $46.50-a-share Avis offer includes $39.25 in cash and 0.6543 of an Avis share for each Dollar Thrifty share.
The proposal is 4.5 per cent less than Dollar Thrifty’s closing price yesterday.
In May this year Avis chief executive Ronald Nelson has stated he would make a “significant” offer for Dollar Thrifty.
Avis up following announcement
In its offer letter yesterday, Avis said Dollar Thrifty should require Hertz to eliminate two provisions in its bid - a $44.6 million break-up fee and the right to match competing offers - in return for permission to continue making offers for the company.
On April 26th this year Hertz offered $41 a share in cash and stocks for Dollar Thrifty to add to its namesake and Advantage brands and extend its lead over Avis as the economic recovery spurred travel.
In a statement Dollar Thrifty said it remained bound by the terms of the original deal with Hertz, with shareholders scheduled to meet in September to vote on the deal.
“The Dollar Thrifty board of directors will review and consider the terms of the Avis Budget proposal in accordance with its fiduciary obligations to shareholders and consistent with the company’s commitments under the Hertz merger agreement,” explained a statement.
Shares of Avis closed up at $10.92 Tuesday on the New York Stock Exchange.