Car rental giant Dollar Thrifty has offered its support to a $1.46 billion takeover bid from rival Hertz Global Holdings, rejecting a higher bid from Avis Budget Group.
Avis raised the cash portion of its bid to $45.79 a share earlier this month, while keeping the stock portion at 0.6543 of an Avis share.
However, Avis declined to match Hertz’s termination fee, which Dollar Thrifty had requested.
The offer valued Dollar Thrifty at $53.09 a share, or $1.52 billion, based on today’s closing prices, while Hertz’s most recent bid, which it said was final, is worth $50.78 a share, or $1.46 billion.
“Avis Budget has not demonstrated to our satisfaction its proposed transaction can be completed in a timely manner and that it would adequately protect our shareholders in the event that Avis Budget is unable to obtain the required regulatory approvals,” said Tulsa, Oklahoma-based Dollar Thrifty in a statement.
As a result of the decision the Dollar Thrifty board will recommend shareholders vote to approve the Hertz merger at a special shareholder meeting on September 30th.
Hertz and Dollar Thrifty executed a definitive merger agreement on April 25th this year which was subsequently amended on September 10th.
Under the terms of the deal Hertz will acquire Dollar Thrifty for $43.60 per share in cash, inclusive of a special cash dividend to be paid immediately prior to the transaction closing, and 0.6366 shares of Hertz common stock.
The transaction is subject to customary closing conditions, regulatory approvals, approval by Dollar Thrifty shareholders and payment of the special dividend.
Dollar Thrifty is being advised by JP Morgan and Goldman Sachs and the law firm of Cleary Gottlieb Steen & Hamilton LLP.