Hertz to buy car hire rival
US car rental company Hertz today said it will buy smaller rival Dollar Thrifty for about $2.3 billion, ending more than two years of on-off takeover talks.
Hertz, which is the number 2 ranked US car rental company, and third-ranked Avis Group have made several offers for Dollar Thrifty, but until now they have been blocked by disagreements over price and doubts about regulatory approval.
The takeover leaves just three players with more than 90 per cent of the US car rental market and cements Hertz's position as the number two, leaving Avis far behind in third.
Privately held Enterprise Holdings, with its Alamo, National and Enterprise brands, is far and away the market leader.
Dollar Thrifty, the final big target in an industry that has consolidated rapidly, this month urged Hertz to make a compelling bid or leave it alone.
Hertz will buy Dollar Thrifty for $87.50 per share in cash, a premium of 8 per cent over Dollar Thrifty's Friday closing price of $81 on the New York Stock Exchange, and almost double a $1.2 billion offer Hertz made in April 2010.
Avis' entry into the bidding in 2010 pushed up the price for Dollar Thrifty, which was at one point during the financial crisis was offered $2 per share by Hertz.
Avis withdrew its offer after it bought Avis Europe last year for about $1 billion.
"Hertz has made a compelling offer to our stockholders that reflects the strength of our business," Dollar Thrifty chief executive Scott Thompson said in a statement.