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Dollar Thrifty Shareholders ask Court to Block Hertz Takeover Vote

The shareholders of Dollar Thrifty Automotive Group have asked the courts to block a vote on the acquisition of the company by Hertz Global Holdings. The issue here is that the investors are starting to second guess if they are getting true value for the company under the offer, as the company’s stocks have risen significantly during the negotiations.

Back in April, Hertz finally made a $1.1 billion bid for Dollar Thrifty, when the company’s shares were lower and shareholders were more welcoming of the acquisition. The deal also included a number of clauses in relation to other bidders. So after Avis made their offer of $1.3 billion for the company, they had to refuse, as this would have meant that Dollar Thrifty had to pay termination fees for accepting Hertz’s initial offer.

One of the investors’ lawyers, Stephen Grygiel, claims that Dollar Thrifty was too eager to accept the bid from Hertz, whose price is terrible. They are asking Delaware Chancery Court Judge Leo Strine to block the vote until regulators finish reviewing the buyout. The attorney has also suggested that Dollar Thrifty’s board has a conflict of interest after it was revealed that JPMorgan Chase & Co and Goldman Sachs, whom they are being advised by, have close ties to Hertz and want the deal to proceed.

Dollar Thrifty has become a very attractive business since it has began rebounding from the recession, particularly to Hertz, who is looking to boost their share of the leisure travel market. However, it’s still up to regulators if any takeover bid leads to the company being successfully bought out.

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