Reuters: Regulatory News: UPDATE 4-Dollar Thrifty calls for end to takeover saga

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UPDATE 4-Dollar Thrifty calls for end to takeover saga Aug 1st 2012, 19:58 Wed Aug 1, 2012 3:58pm EDT * Company says not received any buyout offer this year * Dollar Thrifty open to a deal with larger rival - CEO * Dollar Thrifty met with Avis this year - source By A. Ananthalakshmi Aug 1 (Reuters) - Dollar Thrifty Automotive Group, considered the last big prize in the U.S. car rental industry, urged Hertz Global Holdings to put an end to two years of fruitless takeover offers by making a compelling bid to settle the matter once and for all. Dollar Thrifty, which said on Wednesday it has not received a buyout offer from any party this year, has attracted several bids from Hertz and Avis Budget Group in recent years, but antitrust issues have clouded the process. "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 standalone plan without the constant distraction of merger speculation," Dollar Thrifty said in a statement. Dollar Thrifty and Avis have met several times this year, according to a source familiar with the matter. The company has not had any talks with Hertz this year regarding merger terms, said the source, who spoke on condition of annonymity. Avis could not be reached for comment. A Hertz spokesman declined to comment. "While we believe that things should finally come to a conclusion, we are still open to the very real possibility of a win-win transaction with another larger rental car company," Dollar Thrifty CEO Scott Thompson said in an emailed statement to Reuters. Tulsa, Oklahoma-based Dollar Thrifty's takeover has been delayed by doubts over whether its larger rivals can get regulatory clearance to buy the company. The car rental industry has consolidated rapidly and a Dollar Thrifty takeover would leave just three players dominating more than 90 percent of the U.S. car rental market, led by privately held Enterprise Holdings. Enterprise has never approached Dollar Thrifty about a takeover, the source said. LONG ROAD Avis said it was dropping out of the race for Dollar Thrifty last year after it bought Avis Europe for about $1 billion. Hertz put its offer on hold around the same time, s aying it would wait for antitrust approval before making a final bid. Dollar Thrifty officially ended its sale process in October, but Hertz's continued interest has fueled takeover speculation. Strong results have also helped prop up the stock. Hertz's last offer was valued at about $1.94 billion in October, while Dollar Thrifty's market value has now risen to about $2.12 billion. New Jersey-based Hertz's CEO Mark Frissora said on a post-earnings call earlier this week that the company was still interested in acquiring Dollar Thrifty and it was in talks with the Federal Trade Commission. If Hertz does make an offer now, it would be much higher than the $1.2 billion it started off with in April 2010. "The longer Hertz waits to wrap this up, the more expensive it is going to be for them," said Roy Behner, co-chief investment officer at Westchester Capital, Dollar Thrifty's third biggest shareholder. Behner said an offer in the mid-$80s would be a good starting point for negotiations. Dollar Thrifty's stock was trading at $71.97, down 3 percent, on Wednesday on the New York Stock Exchange. Hertz's shares fell 2 percent to $11.04. Avis was down about 1 percent to $14.15 on the Nasdaq. UNCERTAINTY REIGNS Dollar Thrifty said media reports of possible asset sales by Hertz in the event of a merger have caused uncertainty for its employees and business partners. The company said it has relayed its concerns to senior officials at the Federal Trade Commission. Dollar Thrifty's Thompson said on a conference call that a few employees have left the company because of the uncertainty. "At some point in time, we need to move forward," the CEO said. "Certainly, it has slowed down what we would be doing from a return-cash-to-shareholder prospective." It bought about $127 million worth of shares so far this year and had about $273 million remaining at the end of June under its current share repurchase program. "We continue to evaluate all alternatives for maximizing shareholder value, including the rationalization of the capital structure through share repurchases or other means," Thompson said. The company reported a higher quarterly profit on Wednesday and raised its 2012 earnings outlook citing the share repurchases. It expects 2012 earnings of $5.25 to $5.70 per share, up from its earlier view of $5.00 to $5.60. Link this Share this Digg this Email Reprints

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