Avis seeks to beat Hertz offer for Dollar Thrifty

Avis Budget Group Inc. on Monday proposed making a “substantially higher” offer to compete against Hertz Global Holdings Inc.’s bid to buy rental-car company Dollar Thrifty Automotive Group Inc.

Dollar rose 15% to $50.70, exceeding the $41 at which Hertz valued its offer for Dollar on April 26. Avis Chief Executive Ronald Nelson wrote Monday of his interest to Scott L. Thompson, CEO of Tulsa, Okla.-based Dollar.

The Avis letter may pressure Hertz to increase its offer after at least two Dollar shareholders said last week that the initial bid was too low. The Hertz offer was 5.5% more than Dollar’s April 23 close and reflects a strengthening economy that’s spurring travel and corporate mergers.

Nelson had planned an April 28 dinner with Dollar CEO Thompson to discuss an offer that was set up April 19, more than a week before the Hertz announcement, Avis said in a statement.

“We would like to make a substantially higher offer to acquire Dollar Thrifty, especially in light of your recent performance and the potential synergies associated with an acquisition of Dollar Thrifty by Avis,” Nelson wrote in the letter Monday.

Dollar shares climbed $6.71 to $50.70. The shares traded at $4.11 a year ago.

Nelson didn’t provide details on the bid amount.

Dollar did not comment. Hertz is still evaluating the letter and declined to comment further, said Richard Broome, a spokesman.

Hertz, based in Park Ridge, N.J., fell 86 cents, or 6%, to $13.60. Parsippany, N.J.-based Avis slid 4 cents, or less than 1%, to $15.08; the shares have climbed from $2.07 in the last year.