Avis, Dollar Thrifty say still awaiting FTC approval

BANGLAORE (Reuters) - Car rental firm Avis Budget (CAR.O) and its takeover target Dollar Thrifty Automotive Group (DTG.N) said they had not got any indication from U.S. regulators about the approval for a proposed buyout initiated in September 2010.

"Substantial progress has been made in the discussions with the Federal Trade Commission (FTC) ..., but the FTC's position with respect to the competitive issues remains uncertain," the companies said in a joint statement.

The companies said they have responded to FTC's second request on a timetable that would require an official decision from the FTC by end of March or early April.

The two firms agreed to pursue regulatory clearance into the first quarter of 2011. They had earlier decided to work together until December 30.

Avis faces antitrust issues in acquiring Dollar Thrifty as it already has a budget brand that competes with the smaller rival.

Avis Budget and Dollar Thrifty said they made presentations to the FTC explaining how the potential transaction would not reduce competition in the industry.

"Each believes that intense competition from Enterprise/Alamo/National and Hertz/Advantage, as well as numerous smaller brands, would continue after the proposed transaction," Avis Budget and Dollar Thrifty said.

Dollar Thrifty has been the subject of a takeover battle between Avis and rival Hertz (HTZ.N) as its cheap car-rental offerings are attractive in tight economic times.

After shareholders voted down the Hertz offer, Dollar Thrifty agreed to cooperate with Avis to win antitrust clearance before signing any merger agreement.

Avis Budget shares, which have gained 30 percent in the last three months, closed at $14.28 on Monday on Nasdaq. Dollar Thrifty shares closed at $48.70 on Monday on the New York Stock Exchange.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Roshni Menon)