Hertz to commence exchange offer for Dollar Thrifty this week

(Reuters) - Hertz Global Holdings Inc (HTZ.N) said it would start a direct exchange offer this week for smaller rival Dollar Thrifty Automotive Group (DTG.N), as it gets aggressive to wrap up the deal which has been hanging fire for more than a year now.

Hertz, which renewed its offer to buy Dollar Thrifty for $2.08 billion earlier this month, has been competing with Avis Budget Group Inc (CAR.O) to takeover the company. It maintains that the company is looking at a friendly takeover.

Last week, Dollar Thrifty adopted a shareholder rights plan to thwart any unfriendly takeover offer. It has asked its shareholders not to take any action regarding the exchange offer.

"The exchange offer is not completed until their Board approves; launching the offer is a formality," Richard Broome, Hertz spokesman told Reuters.

Shares of Dollar Thrifty closed at $80.9 on Friday, 12 percent higher than Hertz's offer price of $72 a share.

"I think they are hoping to get the conversation started not just for Dollar Thrifty but also push the Federal Trade Commission's anti-trust review process along as well," analyst Fred Lowrance of Avondale Partners said.

In September, Hertz walked away after Dollar Thrifty shareholders rejected its offer, leaving rival Avis as the likely winner in a long-running bidding war for the company. However, Avis has been unable to get anti-trust clearance till date.

"Everybody wants a resolution to the anti-trust question and I think by initiating an exchange offer, it kind of puts the FTC on a proverbial clock to come to a conclusion on the anti-trust concerns," Lowrance said.

Consolidation in the U.S. car rental market has been rapid, leaving four major rivals -- Hertz, Avis, Dollar Thrifty and privately held Enterprise. As a result of this, antitrust concerns have emerged as a key factor in the battle for Dollar Thrifty.

Dollar Thrifty is currently working with both Hertz and Avis Budget to get antitrust clearance. It hasn't signed any agreement with either of the companies.

Shares of Hertz were trading down 2 percent at $15.67, while shares of Dollar Thrifty were down 1 percent at $80.34. (Reporting by Megha Mandavia in Bangalore; Editing by Sriraj Kalluvila)