IN A major deal today U.S car rental firm Hertz Inc agreed to buy Dollar Thrifty Automotive Group for an about $1.2 billion. This move will boost the Hertz's presence in the leisure rental category. The car rental industry is recovering from the crisis as global market is showing healthy sign of recovery.
The deal had been finalized in cash and stock offer of $41 per share at 5.5 premium on closing price of $38.85 on Friday. According to Reuters data, the value of the company is $1.17 bn on its share outstanding of 28.6 million as on 24 February. After this buy out Hertz will have just one listed competitor in the US.
“Dollar Thrifty also has a strong international presence, complementing our global footprint, which enables us ti utilize a recognized brand to accelerate our leisure rental strategy in Europe and other Market,” Hertz CEO Mark Frissora said.
Hertz said in an statement that it expects the deal, which is 80% cash and 20% stock, to be immediately accreative to its annual adjusted earning when completed. In this deal, Hertz will pay $750 million in cash and issue 18 million shares of its common stock, excluding the special $200 million dollar Dollar Thrifty dividend.
This move of Hertz is going to give it a global edge along with domestic advantage. But market is not upbeat about the deal.
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