Dollar Thrifty/Hertz remedy package lined up amid FTC impatience

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Hertz Global Holdings (NYSE:HTZ) has presented the Federal Trade Commission’s (FTC) staff with a remedy package to help support its bid for Dollar Thrifty Automotive Group (NYSE:DTG), a source familiar with the matter told dealReportert.

As part of the package, it looks like Hertz has lined up a strategic divestiture buyer that is a legitimate buyer, a move that is likely to be championed by the FTC, according to an outside antitrust attorney. The divestiture buyer lines up well to what an official has portrayed as an acceptable candidate.

After Hertz did not submit a bid by Dollar Thrifty’s October “final” deadline, Dollar Thrifty announced plans to go forward on a standalone basis. Hertz subsequently withdrew its exchange offer, but said it planned to continue working to achieve antitrust clearance.

The pursuit of Dollar Thrifty is now approaching its 18 month with no deal having been inked and no consent order issued by the FTC. Such a situation is rare at the FTC, and officials have registered strong apprehension in issuing what they deem “advisory opinions” on potential transactions without signed merger agreements.

The situation has sapped considerable FTC resources, forcing a policy debate on the topic at the agency, according to an official, and it is unclear how far the matter can proceed without a deal being inked.

The outside antitrust attorney said that he believes that Hertz may be able to go as far as reaching an agreement with FTC staff, yet he said the five FTC Commissioners will probably not take the matter up for vote until Dollar Thrifty and Hertz have entered into a merger agreement.

Numerous attempts by this news service to get FTC commissioners to comment on the matter have yielded little clarity, except for remarks that they believe a similar hypothetical situation would represent “a huge problem.”

Dollar Thrifty has warned suitors that “any proposal that did not eliminate the antitrust regulatory risk of the transaction for its shareholders would not likely be acceptable.” The company will probably not entertain any deal discussions without a consent order in hand, the source said.

At this point in the process, there may be too many moving parts to entice Dollar Thrifty to the table, according to the source, who highlighted the potential for the divestiture process to fall apart.

Dollar Thrifty declined to comment on the matter. Hertz did not immediately respond to requests for comment.

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