DETROIT (Bloomberg) -- Hertz Global Holdings Inc., the largest publicly traded rental-car company, offered to buy Dollar Thrifty Automotive Group Inc. for $2.24 billion in cash and stock, countering a bid by competitor Avis Budget Group Inc.
Hertz offered $72 a share, 24 percent more than Avis's offer, the Park Ridge, N.J.-based company said today in a statement.
Hertz aims to thwart the planned combination of Avis and Dollar Thrifty after having an earlier offer rejected. Since then, Avis and Dollar Thrifty have been seeking U.S. Federal Trade Commission approval for a deal that would combine the third- and fourth-largest U.S. rental car companies.
"I feel certain that this will not be the last act of the bidding process either," Fred Lowrance, an analyst with Avondale Partners LLC in Nashville, Tenn., said in an e- mail. "I would expect to hear from Avis -- FTC clearance or not -- very soon."
Hertz's offer, which isn't subject to financing conditions, consists of $57.60 in cash and 0.8546 Hertz shares. Including options and equity awards, Hertz said Dollar Thrifty has 31.2 million shares outstanding, valuing the offer at $2.24 billion. The rental-car company, which has begun the process of selling its Advantage brand to facilitate FTC approval, has started discussions with the regulator, Hertz said.
"We have today made a superior bid," CEO Mark Frissora said in the statement, which described the offer as an 18 percent premium to the 60-day average share price. "We are seeking a consensual business combination with Dollar Thrifty and are proceeding on an accelerated timetable."
Hertz said it decided to act after listening to Dollar Thrifty and Avis's conference calls last week discussing their quarterly earnings and hearing little advancement with regulators.
"The timing was right for us to jump in and push through, given the lack of progress over what was happening with the FTC," Frissora said today on a conference call with analysts and investors. Hertz has been "waiting and watching for a long time." Hertz already owned about 1.6 percent of Dollar Thrifty's outstanding shares as of April 29, according to a filing today.
Investors in Dollar Thrifty rejected a $1.44 billion offer from Hertz, the largest worldwide airport car-rental brand, on Sept. 30, providing an opening for Avis to buy the company. At the time, Hertz said the offer was its "best and final."
The winning bidder would become the second-largest U.S. auto-rental chain by revenue, trailing only closely held Enterprise. Avis offered $45.79 and 0.6543 of its shares for Dollar Thrifty and, in early October, agreed to delay an exchange offer while the two began working toward regulatory approval.
Avis also offered a $20 million breakup fee that Dollar Thrifty had requested. Andrew Siegel, an Avis spokesman, declined to comment today. In January, Dollar Thrifty said the FTC's position on the potential bid "remains uncertain." A little more than a month later, Avis said it "remained committed" to acquiring Dollar Thrifty and that it hoped to get clarity from the FTC in a few weeks.
Before the September vote, Hertz and Avis fought over Dollar Thrifty for almost five months, seeking a bigger share of the U.S. market. The four largest U.S. rental-car companies account for 81 percent of the industry's revenue, according to IBISWorld.
Hertz is the largest worldwide airport car-rental brand, operating from more than 8,500 locations in 150 countries. Ford Motor Co. in December 2005 sold Hertz to Clayton Dubilier & Rice Inc., the Carlyle Group and Merrill Lynch's buyout unit. The car-rental company raised $1.32 billion in an initial share sale less than a year later.
Dollar Thrifty stock has gained 79 percent since the day before Hertz announced its first offer in April 2010. The shares had fallen from $53 on March 22, 2007, to 62 cents on March 9, 2009.