Dollar Thrifty Automotive Group shareholders on Thursday
defied their board's recommendations by rejecting Hertz's offer to acquire the
company, opening the door to consideration of a competing bid by Avis Budget
Group.
After several hours of voting in Chicago, Dollar Thrifty
shareholders turned down the proposal by a margin of about 13.8 million shares
to 11.8 million shares, according to multiple news sources. Hertz on Wednesday
said that if Dollar Thrifty shareholders rejected the deal, it would take its offer off the table permanently and end efforts to acquire the company.
Avis Budget, which for the past several months has been
locked in a bidding war with Hertz for Dollar Thrifty, had issued an 11th-hour
sweetener to include a $20 million breakup fee, which would protect Dollar
Thrifty should the deal fail to get antitrust approval. Hertz's deal included a
$44.6 million breakup fee.
Avis Budget's offer already outpriced Hertz's offer at an
estimated $53 per share, compared with Hertz's offer of $50.25 per share, or
about $1.46 billion. Even so, analysts—and Dollar Thrifty's board—had said the
Hertz deal would face a less difficult battle for antitrust clearance, since
Avis already has a large, established brand in the same pricing tier as Dollar
Thrifty.
"It was surprising to me," said car rental
consultant Neil Abrams of Abrams Consulting Group. "Even though the Avis
deal had a premium of about $2.50 a share, I thought the deal certainty
associated with the Hertz offer offset the somewhat higher price."