As the battle for Dollar Thrifty continues between car rental giants Avis and Hertz, The board at Dollar is asking shareholders in the hire company not to tender shares after Hertz offered a buy out deal worth $2.25 billion. Stockholders have been advised by the Tulsa based company not to take any action, even though Dollar Thrifty last month agreed that it would work with Hertz to gain antitrust clearance from regulators.
The regulators fear that if Dollar Thrifty is swallowed up by one of its rivals, competition in the US car hire market will be severely limited with an unfair knock on effect to the consumer.
Avis has offered $45.79 per share for Dollar stock plus 0.6543 shares in Avis. The deal is worth in the region of $1.77 billion. However, Avis too is tied up with the antitrust regulators. In October last year, Dollar Thrifty asked Avis to hold off on any formal bid for the company so that the two could concentrate on obtaining regulatory approval. Avis agreed.
Scott L Thompson, president and chief executive at Dollar Thrifty, issued a statement in which he said the company’s board was recommending that shareholders do nothing regarding the Hertz exchange offer for the time being as it is still not clear how long the antitrust regulatory procedures were going to take or what the outcome was going to be.
He added that Dollar Thrifty’s board was continuing to monitor the situation and could change its recommendation to stockholders if progress is made.
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