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Them’s Fightin’ Words

September 23, 2010

The latest bidding war in the world of rental cars, between Hertz and Avis for Dollar Thrifty General, was ratcheted up another notch today.  Avis issued a press release declaring its intent to raise its bidding price to nearly $46 a share (or about $1.5 billion total).

There’s an interesting subplot here, which is threatening to become the main plot.  Avis has grown increasingly frustrated by what it sees as the lack of a “fair and level playing field”: Hertz and Dollar Thrifty, Avis argues, are rushing to complete their deal despite the fact that it is “clearly inferior” to its own proposal, and despite its insistence that there are significant antitrust hurdles to be cleared before any acquisition is put to a vote of shareholders.

Here’s some characteristic language from recent statements by Avis:

“Hertz resorts to antitrust as a scare tactic and a smoke screen—a last-ditch effort to deflect attention from its clearly inferior offer—but Hertz is wrong on the process and wrong on the facts.”

“Dollar Thrifty’s Board continues to disappoint.”

“We believe it would be beneficial for Dollar Thrifty shareholders if the Dollar Thrifty Board of Directors engaged in a process to maximize value, rather than letting Hertz dictate timing and process.”

“Hertz cherry- picks data and time periods, and uses deeply flawed modeling, to present baseless and inflated divestiture numbers for an Avis Budget transaction.”

So far, both Hertz and Dollar Thrifty have tended to take the high road in response to Avis’s barbs.  But if the latest offer from Avis changes the complexion of the negotiations, that could change as well.

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