A proposed $1.2 billion deal that would see the Dollar Thrifty rental car agency acquired by rival Hertz Global Holdings may not be the best option for Dollar Thrifty stockholders.Attorneys for the shareholders of Dollar Thrifty have asked a Delaware judge to delay a vote regarding the merger. The goal is to allow more time for Dollar Thrifty to consider counteroffers from Hertz's rival, Avis Budget Group. Avis initially tried to buy Dollar Thrifty out from under Hertz by offering $1.3 billion in cash and stocks - an offer that Dollar Thrifty turned down.
Dollar Thrifty shareholders claim in a class-action lawsuit that the company's directors agreed to an inadequate offer from Hertz without exploring other bids.
The plaintiff brief asserts that "unwarranted deal protections" between Dollar Thrifty and Hertz are "impeding an open bidding contest between Hertz and Avis," a contest that would ensure that shareholders get the most out of the merger.
In the opinion of Steven M. Davidoff of the New York Times' DealBook blog, the argument won't hold water.
"The problem with the plaintiffs' legal brief is that it lacks a motive," Davidoff writes. "What is the private, extraordinary gain that the Dollar Thrifty board and its executives are obtaining that would justify taking an inferior offer?"
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