Avis Budget Group sweetened the cash portion of its offer to acquire Dollar Thrifty Automotive Group by $1.50 a share on Thursday, attempting to sway shareholders away from the deal in place with Hertz.
The revised offer is $40.75 in cash and 0.6543 shares of Avis Budget stock, and represents a premium of more than 22% over Hertz’s offer, said Avis Budget.
According to wire reports, Avis Budget's offer is now valued at $47.13 per share, or about $1.35 billion in total.
In April, Dollar Thrifty agreed to be acquired by Hertz for about $1.17 billion in cash and stock. Avis Budget countered with a $1.33 billion bid in late July, which was rejected by Dollar Thrifty in early August.
At the time, Dollar Thrifty CEO Scott Thompson said the company rejected the offer because Avis Budget couldn’t prove that the deal would clear antitrust hurdles, and because Avis Budget failed to cover Hertz's termination fee with a "reverse termination fee." The omission of a reverse termination fee indicated a "lack of confidence" in getting antitrust approval, he said.
Dollar Thrifty faces a termination fee exceeding $40 million if it breaks off the Hertz deal. Avis Budget's latest offer also does not include a reverse termination fee.
On Thursday, Avis Budget said, "Both deals raise complex and similar antitrust issues."
Avis Budget also accused Hertz of "resorting to antitrust as a scare tactic and a smoke screen — a last-ditch effort to deflect attention from its clearly inferior offer."
Regarding the reverse termination fee, Avis Budget said, "Contrary to certain Dollar Thrifty and Hertz statements, a reverse termination fee has nothing to do with certainty of closing. Economic compensation for failing to close does not impact whether a deal is reasonably likely to close."
Avis Budget also said it shouldn't have to submit a reverse termination fee because a "fair and level playing field should be created that would allow Dollar Thrifty shareholders the benefit of a competitive sale process — a process that, to date, they have been denied."
Dollar Thrifty shareholders are scheduled to vote on the Hertz deal on Sept. 16.
Should shareholders reject the deal, Avis Budget said it would sign a deal with Dollar Thrifty within five days of the Sept. 16 meeting.