Dollar Thrifty Automotive Group Inc. announced in an Oct. 11 press release that it has formally concluded its process to solicit definitive proposals regarding a potential business combination.
On Aug. 21, Dollar Thrifty issued a letter advising parties of the company's intention to solicit for submission in early October 2011, best and final definitive proposals regarding a potential business combination. In its letter, Dollar Thrifty stated that any proposal that did not eliminate the antitrust regulatory risk of the transaction for its shareholders would not likely be acceptable. As of Oct. 10, the company had not received any proposals meeting this criterion. Consequently, Dollar Thrifty has terminated its solicitation process and will continue to execute its current stand-alone plan.
“The purpose of setting a deadline for submission of bids was to bring clarity to the next steps for the company,” said Scott L. Thompson, president and CEO, in the release. “As we said all along, continuing uncertainty is in no one’s interest. While Hertz's May 2011 exchange offer remains outstanding and on Oct. 7 Hertz's CEO called me personally to reaffirm their commitment to pursuing the acquisition of Dollar Thrifty, the fact remains that they have not made a proposal that addresses our board's requirements. Having received no acceptable offer after conducting an unprecedentedly open process with clearly articulated requirements, it is time for us to move forward on a stand-alone basis."
Share Repurchase Plan Affirmed
Dollar Thrifty also confirmed today that it plans to commence its previously announced share repurchase program after its third quarter earnings call on Nov. 1. Under the terms of the share repurchase program, the company's board of directors has authorized the repurchase of up to $400 million of DTG stock.
The company stated that it expects to complete share repurchases of up to $100 million per quarter over the course of the next four quarters, and anticipates that purchases will be executed through accelerated stock buyback programs each quarter. The company may also repurchase shares in privately negotiated transactions, pursuant to derivative instruments or other types of transactions and arrangements. The share repurchase program may be increased, suspended or discontinued at any time.
Earnings Outlook Reiterated
Dollar Thrifty also reiterated its preliminary expectations for earnings results for the third quarter of 2011. The company expects rental revenue to increase by approximately 2 percent as compared to the third quarter of 2010. Corporate Adjusted EBITDA, excluding merger-related expenses, is expected to range from $110 to $120 million for the quarter, as compared to $93.7 million for the third quarter of 2010. The company noted that it expects gains from sales of risk vehicles to be approximately $18 million in the third quarter of 2011, compared to approximately $10 million of gains in the third quarter of 2010.
The company noted that its previously announced guidance for the full year of 2011 for rental revenues and fleet costs, as well as its targeted range for Corporate Adjusted EBITDA, excluding merger related expenses, of $270 to $290 million, remain unchanged.
"It is also important to emphasize that Dollar Thrifty is well positioned for these uncertain times, as rental car customers become even more value-focused,” Thompson said. “Our long established value brands combined with our low operating cost and solid balance sheet are serving us well. We are on track for another record year."
Dollar Thrifty to Announce Third Quarter 2011 Financial Results
The Company will announce third quarter 2011 financial results prior to market open on Tuesday, Nov. 1.
A conference call to review the company's third quarter 2011 results will be held at 8 a.m. CT Nov. 1. Thompson will lead the call. Also participating will be Cliff Buster, chief financial officer. A live audio webcast of the call will be available on the company's website http://www.dtag.com/.
Domestic participants should call 888-946-7608 and use the passcode "Dollar Thrifty." The number for international participants is 630-395-0278. Please call in approximately 10 minutes prior to the beginning of the call.
A replay of the conference call will be made available one hour following its conclusion. To access the domestic audio replay, call 800-294-4406.
The international replay number is 203-369-3231. The audio replay of the call will be available through Nov. 15, 2011. It will also be available on the “Investor Information” page of the corporate website for one year.
J.P. Morgan Securities LLC and Goldman Sachs & Co. are acting as financial advisers to Dollar Thrifty and Cleary Gottlieb Steen & Hamilton LLP is acting as Dollar Thrifty's legal counsel. The board will review and consider any changes to the Hertz offer or any other proposals that may be made by Hertz or others, in accordance with its fiduciary duties.