The CEO of Longbow Asset Management Co., Jake Dollarhide, said Avis Budget's decision to discontinue attempts to buy Dollar Thrifty wasn’t such a difficult one due to current market conditions as well as its exciting pending purchase of Avis Europe.
In a statement, Dollarhide said, "Without a doubt, the ball is now unequivocally in Hertz's court, but, what will they do with the "ball" (e.g., the standalone opportunity to make one final push to acquire Dollar Thrifty), and what are Dollar Thrifty shareholder expectations given recent "ugly" conditions in the stock market? In my opinion, the late summer stock market slide has made Hertz's quest for eventual Dollar Thrifty shareholder approval more difficult."
Automotive industry analysts notice the lack of competitive bidding going on with Dollar Thrifty Automotive Group and this weakens their bargaining position with the other company attempting to buy them out; Hertz Global Holdings Inc (Public, NYSE:HTZ).
Scott L. Thompson, the CEO of Dollar Thrifty said that bargaining for their company may be just as difficult for Hertz. He stated, "I have always thought the company's standalone value would be the highest hurdle for Hertz to clear in its attempt to buy Dollar Thrifty. We are pleased Avis disclosed that the FTC (Federal Trade Commission antitrust) process has gone well, and that may give them options in the future. In this circus, you just never know what the future will bring."
Fred Russell, CEO of Fredric E. Russell Investment Management Co. Inc. shared, "Avis has left the negotiating table, and Dollar Thrifty can no longer play one against the other. A Hertz offer likely will be more attractive to Dollar Thrifty. If Hertz went to the (Dollar Thrifty) board and made an offer in the $60s (per share), I believe the board would consider the offer seriously ... and may very well accept it."
It was only this past May when Hertz launched a $2.25 billion $72-a-share exchange offer for outstanding shares of Dollar Thrifty common stock. The exchange offer, which was based on Hertz's closing price on May 6, consists of $57.60 in cash and 0.8546 shares of Hertz.
Approximately a year ago, Avis Budget made a $1.5 billion cash-and-stock offer for Dollar Thrifty before Dollar Thrifty shareholders rejected Hertz's $1.46 billion $50.99-per-share offer.
In conclusion, Avis Budget said in a statement, “We have made significant progress toward obtaining U.S. regulatory clearance for the acquisition of Dollar Thrifty Automotive Goup and we believe that such regulatory clearance could be obtained. Nonetheless, we have decided not to pursue a transaction at this time in light of current market conditions."