Hertz completes Dollar Thrifty acquisition
BY D.R. STEWART World Staff Writer
Monday, November 19, 2012
Hertz Global Holdings Inc. has completed its $2.3 billion $87.50-per-share acquisition of Tulsa’s Dollar Thrifty Automotive Group Inc., executives of the Park Ridge, N.J., rental car company said Monday.
Although there was over-the-counter trading of a couple hundred Dollar Thrifty shares on Monday, the New York Stock Exchange suspended trading of the shares just before noon EST, Hertz executives said.
By late Friday, Hertz said it had purchased 27,956,234 shares of Dollar Thrifty, representing about 99.6 percent of the total outstanding shares, company executives said.
“The (acquisition) transaction is closed,” said Hertz spokesman Richard Broome. “(Dollar Thrifty) is a wholly owned subsidiary of Hertz.”
Broome said Dollar Thrifty shares are being delisted by the NYSE and that Hertz will issue a statement early Tuesday announcing the Dollar Thrifty acquisition has been completed.
Broome said Hertz executives on Tuesday will be at Dollar Thrifty corporate offices at 5310 E. 31st St.
“We’re going to be meeting with employees and expressing our appreciation for their hard work,” Broome said. “Other than speaking with Dollar Thrifty employees on Tuesday, there will be no public appearances or announcements.”
Hertz has not established a time frame for the transition to new executive leadership at Dollar Thrifty, Broome said.
“Their management stays in place and will be making all day-to-day decisions at this point,” Broome said. “We have no date or time frame for new management taking over.”
Hertz’s third and final public bid for Dollar Thrifty was accepted by the boards of directors of both companies in late August.
On Thursday, the Federal Trade Commission conditionally approved the acquisition of Dollar Thrifty on Hertz divesting its Advantage discount rental car brand as well as 29 Dollar Thrifty on-airport rental car locations in the United States.
Neither the FTC nor Hertz has disclosed the locations of the 29 Dollar Thrifty on-airport locations.
The FTC said the Dollar Thrifty/Hertz merger as originally proposed would have been anti-competitive.
By reducing major rental car competitors from four to three, the Dollar Thrifty/Hertz merger would lead to substantially more concentration in 72 airport rental car markets, the FTC said.
Hertz controls 26 percent of U.S. airport car rentals, the FTC said, while Dollar Thrifty’s market share of the airport rental car market is about 12 percent.
The merger as originally proposed also would have eliminated head-to-head competition between Dollar Thrifty and Hertz at several large U.S. airports, including John F. Kennedy International Airport in New York and Baltimore/Washington International Airport, the federal agency said.
By requiring Hertz to divest its Advantage brand and the Dollar Thrifty on-airport locations, the FTC said Advantage becomes the nation’s fourth largest rental car operator and an effective on-airport competitor.
As announced previously, Hertz has reached an agreement to sell its Advantage business to Adreca Holdings Corp., a subsidiary of Macquarie Capital, which is operated by Franchise Services of North America Inc.
Hertz, the nation’s second largest rental car company after leader Enterprise Rent-A-Car, employs 24,000 people worldwide, including 1,700 at a regional operations center in Oklahoma City. The company has an average rental fleet of 355,000 vehicles.
Dollar Thrifty is the fourth largest rental car company in the United States, after Avis Budget Group, with 5,900 employees, including 780 in Tulsa, and an average rental fleet of 107,000 vehicles.
Hertz shares closed Monday at $14.79, up 25 cents or 1.7 percent.