Avis Budget Group (NYSE:CAR) said on Wednesday that it is pulling its offer to acquire rival Dollar Thrifty (NYSE:DTG), leaving the door open for Hertz Global (NYSE:HTZ) in what has been a lengthy bidding war for the car renter.
Avis initially launched a bid for Dollar Thrifty in September of last year. That offer, at $45.79 a share in cash, with a total value of about $1.5 billion, was trumped when rival bidder Hertz proposed a $50-a-share offer.
Hertz lifted its bid significantly months later to more than 30% above its previous bid, and at $2.1 billion, far above Avis' offer, in an effort to close on the deal as Avis struggled to acquire regulatory clearance.
We have made significant progress toward obtaining U.S. regulatory clearance for the acquisition of DTG, and we believe that such regulatory clearance could be obtained, Avis said in a statement. Nonetheless, we have decided not to pursue a transaction at this time in light of current market conditions.
Hertz, meanwhile, extended its deadline for the offer last week to Nov. 1. Its previous exchange offer of $57.60 a share in cash and 0.8546 shares of Hertz common stock per Dollar Thrifty share was set to expire on Sept. 9, however, only about 2.6 million shares had been tendered as of that date.
The company said then that its offer had not changed and it would continue pursuing clearance from the Federal Trade Commission.
Avis said last week it expects to report strong third-quarter revenue growth on stronger summer demand. It predicted revenue would climb 7% to 8% to about $1.6 billion, higher than average analyst estimates polled by Thomson Reuters of $1.59 billion.
The company announced in June a deal to acquire Avis Europe for about $1 billion. And while it still proclaimed its interest in Dollar Thrifty at that time, it put most of its weight behind the Avis Europe deal.