Avis Budget's (CAR.O) top shareholder said it may hold talks with the car rental firm's board on an appropriate price the company should pay for Dollar Thrifty DTG.N -- a $1.66 billion deal which has been waiting for antitrust clearance for the past five months.
Hedge fund Senator Investment Group also raised its stake in Avis to 7.24 percent from 5.79 percent and said it may discuss other strategic alternatives.
Shares of Avis Budget closed up 1.35 percent at $18 Friday on Nasdaq. They touched a three-year high of $18.44 earlier in the day.
In a regulatory filing, the Senator Investment said it may engage in talks "with regard to the appropriate price and structure of a potential transaction with Dollar Thrifty Automotive Group or other strategic alternatives that may maximize shareholder value."
Senator Investment and Avis refused to comment further.
Avis and Dollar Thrifty have been pursuing antitrust clearance since October, 2010 after Dollar shareholders voted down a rival offer from Hertz (HTZ.N).
Hertz first made an offer for Dollar Thrifty in April, 2010.
Avis' proposed deal faces regulatory issues as it already has a budget brand that competes with Dollar Thrifty.
New York-based Senator Investment, which has about $2.44 billion in assets under management, has been an active investor in the car rental industry.
It owns 7.5 million shares of Avis and 1.70 million shares of Hertz.
Senator Investment bought 2.25 million shares in Dollar Thrifty last year after Hertz made the offer, and had said it may hold discussions with Dollar Thrifty on a possible sale. It later sold off its stake in Dollar Thrifty.
Avis' offer for Dollar Thrifty currently stands at $1.66 billion, or $57.57 a share, based on the stock's Friday closing. Dollar Thrifty shares closed at $64.46 on the New York Stock Exchange.
(Reporting by Megha Mandavia, A. Ananthalakshmi; Editing by Unnikrishnan Nair)