No. of Recommendations: 0

This has long been in the works -- Avis and Hertz had been bidding in a 2-year long on-again / off-again set of bids -- and they've finally agreed upon a price of $87.50 per share ($2.3 billion). As part of the deal, Hertz will divest itself of Advantage, selling it to FSNA and Macquarie Capital.

Shares are up strongly on the news, today, moving the overall Hertz position back into the green (bought at $17.18 and $10.95, average of $14.34).

Dollar Thrifty can solicit bids for 30 more days and there's no breakup fee if it accepts another bid. Hertz would move strongly into the #2 position (behind privately-held Enterprise), leaving Avis a distant third. So there might be incentive for Avis to up the ante. I hope the two don't get into a bidding war. Right now the price of Dollar Thrifty is $87, slightly below the deal price, which indicates that the market currently doesn't expect a rival offer to come in. That's most likely because Avis is still digesting Avis Europe which it bought last year for $1 billion.

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