NEW YORK – International car rental company Hertz announced their plans to buy Dollar Thrifty Automotive Group for $2.3 million. This news has brought hope of achieving more business and garnering more customers as they expand their global reach.
Last Sunday, Hertz Global Holdings Inc. announced that they will pay $87.50 for each Dollar Thrifty share, 8% higher than Friday’s close of $ 81 per share.
According to media sources, Hertz has been negotiating with Dollar Thrifty owners for the past two years. Another rental company involved in the bidding was Avis Budget Group. Hertz won the bid when they increased their offer.
However, Avis abandoned its attempt to purchase to market conditions. In fact, there was also a moment where even Hertz gave up trying to acquire the company. But Dollar Thrifty did not want the years of negotiations to end in nothing. In February, it extended the right of shareholders, called “poison pill”. This is a maneuver to block any unsolicited takeover attempt to late May 2013.
Mark P. Frissora, Hertz President and CEO, said that the acquisition of Dollar Thrifty will access two flagship brands in the vehicle rental industry. This will make their company more competitive in Europe and other markets outside the United States.
“We are delighted to have finally reached an agreement with Dollar Thrifty after long but productive negotiations,” he said.
President and CEO of Dollar Thrifty, Scott Thompson, said the transaction is attractive not only for shareholders, but also expand the brand’s market reach.
Shares of the company rose $5.65 in electronic trading, up by 7%, to 86.65 dollars, before market opening.