Tulsa World: Analysts speculate on sale of Dollar Thrifty

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Analysts speculate on sale of Dollar Thrifty

By Staff and Wire Reports
Published: 10/15/2008 2:10 AM
Last Modified: 10/15/2008 2:58 AM

The replacement of Dollar Thrifty Automotive Group Inc. President and CEO Gary L. Paxton with Chief Financial Officer Scott L. Thompson may speed the car rental company's sale to a rival, a national analyst said Tuesday.

Dollar Thrifty announced the leadership change late Monday. The Tulsa-based company said Paxton will remain a director at Dollar Thrifty and will provide transition support through the end of the year, when he will retire.

In a note to investors Tuesday, Soleil Securities Group analyst Michael Millman said the move might allow the company to act on strategic alternatives more quickly.

"The CEO change doesn't change our doubt that (Dollar Thrifty) can survive as an independent in today's environment," Millman said.

The analyst said, however, that a sale is probably Dollar Thrifty's best alternative. He expects the company to be acquired by Hertz.

Fred Russell, principal with Fredric E. Russell Investment Management in Tulsa, agreed that Hertz is a likely buyer.

"I've long thought there are too many car-rental companies," Russell said in an interview. "I think Hertz would rather buy Dollar Thrifty than see it go bankrupt."

Combining the two would offer many efficiencies, Russell said, including the combining of information technology, accounting, reservation systems and marketing.

"Dollar Thrifty is backed into a corner right now," the money manager said. "With a stock price of $1, it would be very hard for management to resist a reasonable offer."

At midyear, the Tulsa car-rental firm employed 8,500 people worldwide and about 970 in Tulsa.

Dollar Thrifty's stock traded above $55 in February 2007 after rumors surfaced that the company and Tulsa-based Vanguard Car Rental USA Inc. were in merger talks. Such a deal never materialized. Vanguard later was purchased by Enterprise Rent-A-Car.

Shares of Dollar Thrifty gained 6 cents Tuesday to close at $1.03.

Tulsa World Business Editor John Stancavage contributed to this story by The Associated Press.

By Staff and Wire Reports

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dollar.thrifty.employee, (10/17/2008 2:49:14 PM)

I work for Dollar/Thrifty, and I can say that things are definitely going downhill quickly. They just cut our benefit plan, so now it will cost us significantly more. Our fleet is getting older, our costs are getting higher, and our stock price is a joke.

I love DTAG and I'm sure going to be sad if we go under, not just because I work here but because I really like the company, the people, and the culture. But, unfortunately, if Hertz doesn't buy us out, we won't make it much longer.

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