The Hertz offer, which is about 6 percent premium to Dollar Thrifty’s Friday close of $38.85, values the company at about $1.17 billion based on its shares outstanding of 28.6 million as on February 24 according to Reuters data.
Hertz said it expects the deal, which is structured as a combination of 80 percent cash and 20 percent stock, to be immediately accretive to its annual adjusted earnings when completed.
“Dollar Thrifty also has a strong international presence, complementing our global footprint, which enables us to utilize a recognized brand to accelerate our leisure rental strategy in Europe and other markets,” Hertz Chief Executive Mark Frissora said in a statement.
At the closing of the deal, Hertz will issue about 18 million shares of its common stock and pay about $750 million in cash, excluding the special $200 million Dollar Thrifty dividend, Hertz said in a statement.
The company said it intends to fund the cash portion of the purchase price with existing liquidity from the combined company.
Barclays Capital acted as lead financial advisor to Hertz and Bank of America Merrill Lynch also provided advice, the company said.
Shares of Hertz closed at $12.88 Friday on the New York Stock Exchange.
(Reporting by Bijoy Koyitty in Bangalore; Editing by Mike Nesbit)
peHUB Note: Hertz was acquired in a 2005 buyout by The Carlyle Group, Clayton Dubilier & Rice and Merrill Lynch Global Private Equity. The firms later took Hertz public, but still hold a majority stake.
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