Last week we wrote about the Hertz bid for Dollar/Thrifty Rent a Car. This week Dollar/Thrifty are examining another bid for their company from Avis who apparently had been dragging their feet on a deal, until the Hertz loomed on the financial horizon.
It appears that there may be some bad blood or at least a serious misunderstanding between Thrifty’s board and the Avis management.
The New York Times reports that Thrifty said it would entertain an offer from Avis, who has yet to relay what a potential offer could look like. But Thrifty did say in a statement on Tuesday that Avis had made misrepresentations in previous interactions between the two companies.
Meanwhile, in a letter to Thrifty, Avis said it had sought to discuss a potential merger as early as last month, with some sources saying that Avis had expressed interest as far back as 2007.
The letter also said that the two companies had agreed to talk on 19 April to discuss a deal, only for the meeting to be called off after the Hertz deal was announced on 26 April.
However, persons from Thrifty have since disputed the planned meeting, claiming that a merger was not on the agenda.
The Thrifty CEO has also registered irritation with being surprised by the Avis offer.
People familiar with the deal suggested that Scott Thompson, Dollar Thrifty’s chief executive who joined the group two years ago and has been chief executive for 18 months, was taken by surprise by Avis’s move.
Avis on Monday released a letter criticising Mr Thompson and Thomas Capo, chairman, for a “failure to engage in discussions with an interested strategic buyer who you know also would be able to achieve significant synergies as a result of a combination, can be consistent with the fiduciary duties that you and your board carry to seek the best possible deal for your shareholders”.
Hertz is carrying on as though the deal on the table is going to go through, a better bet will be that the price of the deal will go up now that Avis has indicated interest. Avis and Thrifty have had informal discussions in the past.
As with most things in life and especially on Wall Street, money talks.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
