UPDATE 1-Avis Budget says warrant offering may dilute earnings

* Intends to enter into one or more warrant transactions

* Shares fall 9 pct in pre-mkt trade

Oct 7 (Reuters) - Car rental company Avis Budget Group Inc (CAR.N), which on Tuesday offered $250 million in notes along with a warrant transaction, said the warrant transactions could reduce its earnings per share, sending its shares down 9 percent before the bell.

In connection with the offering, Avis intends to enter into one or more convertible note hedge transactions with one or more counterparties, the company said in a filing with the U.S. Securities and Exchange Commission.

The warrant transactions could have a dilutive effect on Avis' earnings per share to the extent that the price of its common stock exceeds the strike price of the warrants, the company said. Parsippany, New Jersey-based Avis Budget expects to grant the initial purchasers of the notes, due in 2014, the right to purchase up to an additional $37.5 million principal amount of notes to cover over-allotments.

Shares of Avis Budget, which competes with Dollar Thrifty (DTG.N), Hertz Global Holdings Inc (HTZ.N), fell to $12.05 in trading before the bell. They closed at $13.28 Tuesday on the New York Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Unnikrishnan Nair)