--Though amount of tendered shares appears low, investors are
likely waiting for companies to obtain FTC approval
--Transaction hinges on FTC approval, a review process Hertz has
said it expects to be completed by mid-October
--Avondale Partners analyst says investors have more financial
flexibility by waiting to tender their shares
Hertz Global Holdings Inc. (HTZ) extended its offer for Dollar
Thrifty Automotive Group Inc. (DTG) to Oct. 22 after only about 24%
of the rival car-rental company's shares were tendered.
Though the amount of shares tendered by Dollar Thrifty
shareholders appears low, investors are likely waiting for the
companies to obtain approval of the Federal Trade Commission.
Hertz, the No. 2 domestic car-rental company by fleet size, in
late August agreed to pay $2.3 billion to acquire Dollar Thrifty,
the No. 4 player in the category, in a deal that would end a long
takeover saga and consolidate the domestic industry to three major
players.
The transaction is expected to close in the fourth quarter, a
timeline that hinges on FTC approval. Hertz has said it would
divest the Advantage brand, as well as some Dollar Thrifty assets
and airport-counter concessions, moves it hoped would result in a
swift FTC review.
Hertz has said it expects to secure an FTC consent decree by
mid-October and by pushing back the tender offer date to Oct. 22,
the company may be suggesting that the expectation for FTC
clearance is still intact.
Avondale Partners analyst Fred Lowrance said while many
investors expect the deal will ultimately close, they have more
financial flexibility by waiting to tender their shares until after
the FTC decision.
"They are likely thinking "Why tender my shares now ahead of FTC
clearance, which is a requirement for actually completing the
tender offer,'" Mr. Lowrance said.
Hertz on Friday said about 6.57 million Dollar Thrifty shares
were tendered as of midnight Friday. Dollar Thrifty had 27.8
million shares outstanding as of July 27.
Dollar Thrifty's shares were trading at $87.06, just shy of the
$87.50 tender offer price. Hertz was down 2 cents to $14.54.
--Melodie Warner contributed to this article
Write to John Kell at john.kell@dowjones.com
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