Stocks Rise as Hertz, Avis Battle for Dollar Thrifty

The increased share value of Hertz, Avis, and Dollar Thrifty may continue as the takeover battle between Hertz and Avis for Dollar Thrifty goes on, according to TheStreet.

The rising demand for cheap rentals and a rebound in business travel are causing an increase in earnings.

Shares of Hertz have jumped 44 percent over the past three months. Avis, which has a $1.57 billion bid for Dollar Thrifty awaiting government approval, has seen shares rise 46 percent.

Dollar Thrifty's shares have risen 79 percent this year, but they have slipped 2.4 percent in the past three months as investors fret about the Avis deal.

The Avis-Dollar Thrifty deal, which was expected to have been approved by year-end, is being held up by the Federal Trade Commission (FTC), which has yet to give it anti-trust clearance. The deal is under scrutiny because the merger would give Avis a dominant position in the low-cost car-rental sector. Avis acquired then-bankrupt Budget Car Rental in 2002.

Car Rental

Avis and Dollar Thrifty have agreed to work together to get federal approval before signing a merger agreement, and that they expect a ruling from the FTC in the first quarter. Avis also faces a challenge in financing its takeover of Dollar Thrifty, but it may have remedied that by shuffling $700 million of its debt and increasing its borrowing capacity by $100 million. It also sold $200 million in bonds Nov. 15 to help fund the deal.