ES of car rental companies Dollar Thrifty Automotive, Hertz Global and Avis Budget Group all rose more than five per cent yesterday as Hertz’s sweetened offer for Dollar Thrifty signaled an industry consolidation that could cut excess capacity and boost prices.
Hertz’s $1.56bn (£1.1bn) offer was the latest move in a bidding war with rival Avis Budget, as the car rental industry has started to show signs of a recovery from a downturn in the economy.
“Whoever wins, a consolidation would be good for all the players involved as it can cut excess capacity and boost pricing,” said Avondale Partners analyst Fred Lowrance.
Hertz on Sunday raised the value of its previous bid for budget brand Dollar Thrifty by more than 25 per cent, boosting the cash portion by $10.80 per share. Avis’ most recent bid, currently worth around $47.83 a share, was well above Hertz’s original $1.1bn offer, but Dollar Thrifty had voiced antitrust concerns because Avis already has a budget brand.