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Dollar Thrifty Adopts Shareholder Rights Plan

Dollar Thrifty Automotive Group's Board of Directors has adopted a plan that is designed to deter or slow down any hostile takeover.

by Staff
May 19, 2011
2 min to read


Dollar Thrifty Automotive Group, Inc. today announced in a press statement that its Board of Directors has adopted a Shareholder Rights Plan under which Dollar Thrifty shareholders will receive rights to purchase shares of a new series of preferred stock in certain circumstances. The Rights Plan was adopted to deter any attempt to obtain control of the company in a manner or on terms that are not in the best interests of the Company and all shareholders.

Scott L. Thompson, President and Chief Executive Officer, said, "We believe it is prudent for our Board of Directors to take this action as a means of ensuring that the Board of Directors, and all shareholders, have a full and fair opportunity to consider any offers to acquire the Company after we have additional clarity on the antitrust regulatory process without the undue influence that may result if one or more holders are permitted to accumulate significant positions in Dollar Thrifty common stock. We see the Rights Plan as a temporary measure that is consistent with our fiduciary duties."

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As previously announced, Dollar Thrifty has agreed to cooperate with Hertz Global Holdings, Inc. in its efforts to pursue antitrust regulatory clearance of Hertz's proposed acquisition of Dollar Thrifty. Dollar Thrifty is also cooperating with Avis Budget Group, Inc. in connection with Avis Budget's efforts to pursue antitrust regulatory clearance of an acquisition of Dollar Thrifty.

Under the terms of the Rights Plan, which will expire in one year, the rights will be exercisable if a person or group, without Board approval, acquires 20% or more of Dollar Thrifty's common stock or announces a tender offer which results in the ownership of 20% or more of Dollar Thrifty's common stock. The rights also will be exercisable if a person or group that already owns 20% or more of Dollar Thrifty's common stock, without Board approval, acquires any additional shares. If the rights become exercisable, all rights holders (other than the person triggering the rights) will be entitled to acquire Dollar Thrifty's common stock at a 50% discount.

The rights will trade with Dollar Thrifty's common stock, unless and until they are separated upon the occurrence of certain future events. Dollar Thrifty Board may terminate the Rights Plan or redeem the rights prior to the time the rights are triggered. Further details of the Rights Plan will be contained in a Form 8-K to be filed with the Securities and Exchange Commission.

J.P. Morgan Securities LLC and Goldman Sachs & Co. are acting as financial advisors to Dollar Thrifty and Cleary Gottlieb Steen & Hamilton LLP is acting as Dollar Thrifty's legal counsel.

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