Hertz Global Holdings Inc. said Friday, Aug. 3, it remains in talks with the Federal Trade Commission over a potential purchase of rival Dollar Thrifty Automotive Group Inc., and warned it was likely to take a loss on a divestiture related to the potential deal.
Park Ridge N.J.-based Hertz originally agreed to a $1.45 billion deal to acquire Dollar Thrifty in May 2010, but that deal was vetoed by shareholders after a rival bid from Avis Budget Group Inc. emerged. Both Hertz and Avis walked away last year, but Hertz has continued to discuss potential antitrust remedies with regulators in hopes of rekindling a deal.
Hertz in a Securities and Exchange Commission filing said "we continue to believe that a merger with Dollar Thrifty is in the best interests of both companies" but added it can "offer no assurance that any transaction with Dollar Thrifty will be commenced or consummated."
Any deal for Dollar will almost certainly involve Hertz divesting its Advantage discount rental unit, and the company in the filing said it expects that it will take a loss on a potential sale. Hertz bought Advantage out of bankruptcy in 2009 for $33 million and is believed to have a tentative deal in place to sell the unit to the parent of U-Save Car & Truck Rental.
Hertz had hoped to buy Dollar Thrifty to gain a greater share of the nonbusiness rental market. Dollar ranks fourth in the auto rental industry behind Enterprise Holdings Inc., Avis and Hertz, and represents perhaps the last chance for any of the big three to bulk up via acquisition.
Meanwhile, Tulsa, Okla.-based Dollar is growing impatient. The company said Wednesday that lingering uncertainty about a potential merger with Hertz has hampered its business and called on the company to put forward a compelling acquisition proposal.
-- Bill McConnell contributed to this report.