Dollar Thrifty Automotive Group has asked its suitors — Hertz and Avis Budget Group — for their best and final acquisition offers. It appears to be an effort by the company’s president and chief executive officer to speed along a process which has lasted more than a year. 

Scott Thompson tipped off the suitors of his company’s intentions in a letter. The DTAG head gave the companies a deadline of early October for their submissions. He also made it clear in his note that both suitors have had ample time to prepare for antitrust regulatory risks, and as such, any offers that shift this risk onto DTAG shareholders is unlikely to be accepted.

“Hertz and Avis have made substantial progress with respect to regulatory reviews, and our board has concluded that the time has come to determine if, and on what terms, a transaction can be achieved,” Thompson acknowledged in an announcement dated Sunday.

“Continuing uncertainty is in no one’s best interest, and both Hertz and Avis have the information they need to put forward their best and final offers,” Thompson continued.

After highlighting DTAG’s strong financials, he added, “We are optimistic about our future, but it’s clear that bringing closure one way or another to the process with Hertz and Avis is in the best interests of our shareholders, the company and our employees,” he went on to say.

The full text of the letter sent to Hertz and Avis is as follows:

August 21, 2011

Mr. Ronald L. Nelson
Chairman and Chief Executive Officer
Avis Budget Group, Inc.
6 Sylvan Way
Parsippany, New Jersey 07054

Mr. Mark P. Frissora
Chairman of the Board and Chief Executive Officer
Hertz Global Holdings, Inc.
225 Brae Boulevard
Park Ridge, New Jersey 07656

Dear Ron and Mark:

As you are aware, Dollar Thrifty has worked cooperatively with each of Avis Budget and Hertz for many months in an effort to obtain antitrust regulatory clearance for a possible business combination transaction. We understand that these efforts have been fruitful, and believe that each of Avis Budget and Hertz is well positioned to complete the regulatory process in a manner that would permit a combination to be completed with limited economic impact. We appreciate the efforts made by each of your companies as well as your continued interest in Dollar Thrifty.

In light of the regulatory progress that has been made, we believe that it is time to ascertain whether a transaction can be accomplished with Avis Budget, Hertz or another party on terms that our Board of Directors determines are in the best interests of Dollar Thrifty and its shareholders. Accordingly, our Board has determined that it will solicit best and final definitive proposals for submission in early October. Based on the results of this process, we will consider what actions would be in the best interests of Dollar Thrifty and its shareholders. While the details of our process will be furnished separately by our financial advisors in the coming days, I wanted to provide each of you with advance notice in order to give your companies ample preparatory time in which to complete your regulatory efforts. As you can appreciate, in view of the unprecedented opportunity that each of Avis Budget and Hertz has had to assess and mitigate in advance the antitrust regulatory risks of a transaction with Dollar Thrifty, any proposal that requires our shareholders to assume any portion of such risk is unlikely to be acceptable to our Board or shareholders.

Please do not hesitate to let me know if there are any questions.

Very truly yours,

DOLLAR THRIFTY AUTOMOTIVE GROUP INC.
Scott L. Thompson
President and Chief Executive Officer

Editor’s Note: This latest news follows an update that the FTC has issued a second request to Hertz for more information. To read these details as well as other recent stories from Auto Remarketing on this topic, click here.