(Adds share movement, analyst quotes)
By Bijoy Anandoth Koyitty
BANGALORE, June 15 Avis Budget CAR.N said the
U.S. Federal Trade Commission sought additional information on
its potential acquisition of smaller rival Dollar Thrifty
Automotive Group Inc DTG.N.
Avis Budget continues to cooperate with the Federal Trade
Commission in its review of this potential transaction, the No.
2 car rental company in the United States said.
Dollar Thrifty is being wooed by both Avis Budget and the
No. 3 car rental firm, Hertz Global Holdings Inc (HTZ.N), with
Avis looking to defend its market share and Hertz aiming to
displace Avis. [ID:nSGE6420H6]
"It is part of the process. It says the FTC is really
looking at it. FTC has not come out with a ruling," Avondale
Partners LLC analyst Bob McAdoo said by phone. "At this point,
I would not take it one way or the other."
After Avis had indicated it was considering a bid for
Dollar Thrifty, analysts had raised concerns that a potential
deal could draw scrutiny from antitrust authorities.
Avis Budget shares have lost about 30 percent of their
value since mid-May mainly on the recent economic instability,
and the falling share price could make a stock bid difficult.
Sidoti & Co analyst Stephen O'Hara said the biggest
"catalyst" for the stock would be Avis Budget's acquisition of
"Until this issue is solved, we expect Avis Budget's
volatility to remain high."
The analyst added that the stock, however, offers an
"attractive" entry point due to improving fundamentals such as
the air traffic trends.
"We point to airline traffic data, which continue to show
stronger demand for air travel. Airlines are flying more seats
and charging more for those seats," O'Hara, who has a "buy"
rating on the stock, wrote in a note to clients.
The car rental market in the United States is dominated by
privately held Enterprise, which has a market share of 31
Shares of Avis Budget were trading up 2 percent at $11.56
on the New York Stock Exchange.
(Reporting by Bijoy Koyitty in Bangalore; Editing by Don
Sebastian and Saumyadeb Chakrabarty)