Dollar Thrifty, Hertz shares up on new bid report

AP News
Posted: Aug 23, 2012 1:13 PM
Dollar Thrifty, Hertz shares up on new bid report

NEW YORK (AP) — Shares of Dollar Thrifty and Hertz rose Thursday after media reports said Hertz is testing the waters for a fresh bid to acquire its competitor.

Hertz Global Holdings Inc. has pursued Dollar Thrifty Automotive Group Inc. for two years.

Bloomberg, citing anonymous sources, reported that Hertz has asked the advice of Dollar Thrifty shareholders on a new bid price in recent weeks. Hertz has also asked investors if it should make a hostile bid, the report said.

A spokesman at Hertz, based in Park Ridge, N.J., declined to comment on the report. Officials at Tulsa, Okla.-based Dollar Thrifty weren't immediately available to comment.

The push-and-pull between two of the nation's largest car rental companies started in 2010. Avis Budget Group was also in the mix, pursuing a bid for Dollar Thrifty for more than a year.

Avis dropped its bid nearly a year ago citing market conditions. Then in October of last year, Hertz dropped its bid, too. But Dollar Thrifty didn't trust that the years of attempts were over. In February, it extended its shareholder rights plan known as a "poison pill" — a maneuver designed to deter any unsolicited attempts to take over the company — through May 2013.

Dollar Thrifty has become much more valuable since Hertz dropped its bid, and both car rental companies are in much improved financial shape. Since hitting a year-low of $50.94 last October, the stock has hit as high as $84.91 last month. Hertz shares are up about 50 percent since their October low.

Both companies also reported better-than-expected second-quarter results and Dollar raised its expectations for the year. When Dollar reported spring quarter results earlier this month, it suggested it was growing impatient with the years of back and forth.

"After three years of merger-related activity and speculation, it believes it is time for a compelling offer to be made or for this process to come to a close so that the company can move forward under its stand-alone plan without the constant distraction of merger speculation," it said at the time.

Hertz shares rose 54 cents, or 4.4 percent, to hit $12.94 in afternoon trading. Dollar Thrifty gained $3.20, or 4.2 percent, to $78.93.