Car-rental firm Hertz Global Holdings, Inc.(NYSE:HTZ) is finally ready to buy out Dollar Thrifty Automotive Group, Inc.(NYSE:DTG) for $2.3 billion in cash, Hertz said on Monday.
This marks the culmination of a takeover battle between the two companies than has gone on for more than two years.
Dollar Thrifty has been stalked and wooed by both Hertz and third ranked rival Avis but their attempts to take over the company has run into obstacles, first over the pricing and second, over regulatory approvals.
Hertz said that it has offered Dollar Thrifty $87.50 per share, that is at a premium of 8 percent over the Friday's closing price of $81 a share. The final offer made by the No.2car rentals company is way higher than the $1.2 billion it had first offered in 2010.
"We are pleased to have finally reached an agreement with Dollar Thrifty after a lengthy—but worthwhile—pursuit," Hertz Chairman and Chief Executive, Mark Frissora, said. "The transaction provides Hertz instant scale with two new, well- established brands with airport concession infrastructure in the midtier value segment."
Tired of the `now-on and now-off' offers, Dollar Thrifty's management finally asked Hertz in August to make a final offer that would satisfy all parties or allow it to function on its own.
In an effort to gain regulatory approval, Hertz agreed to sell its Advantage Rent-A-Car brand to Franchise Services of North America Inc. and Macquarie Capital, the investment-banking arm of Australia's Macquarie Group Ltd.
The combined company would have more than 10,000 locations world-wide. For the year ended June 30, Hertz and Dollar Thrifty had combined sales of $10.2 billion and earnings before interest, tax, depreciation and amortization of $1.8 billion.
Shares of HTZ soared 13.70% to $14.90 in the pre-market session and DTG added 7.32% to $86.93.