Car Rental Merger Talks Under Way
Wednesday, February 14th 2007, 12:46 pm
News On 6
TULSA, Okla. (AP) Dollar Thrifty Automotive Group Inc. is talking to Vanguard Car Rental about a $3 billion deal that would create the nation's third-biggest car rental service, the New York Times reported Wednesday.
The Times reported Dollar Thrifty, which operates the Dollar Rent-a-Car and Thrifty brands through about 800 outlets in the U.S. and Canada, is in early talks to merge with Vanguard, a Tulsa-based privately owned car rental service.
A tie-up between the two companies would create the third-biggest service behind Enterprise Rent-a-Car and Hertz Global Holdings Inc. The combined company would be bigger than Avis Budget Group.
Shares of Dollar Thrifty were trading on the New York Stock Exchange on Wednesday afternoon at $52.63, up $5.08, and at the top of a 52-week range that has been as low as $37.60.
Spokesmen in Tulsa for both Dollar Thrifty and Vanguard declined comment on the report Wednesday.
J.J. Rissi, a spokeswoman for New York-based Cerberus Capital Management, which owns Vanguard, also declined comment.
Such a deal could make good business sense. Struggling U.S. automakers have reduced bulk sales of cars to rental companies as one way to streamline operations, and the cutbacks have hurt the rental industry's profits.
"It means increased rates because we have increased costs," said Charles Pulley, communications director at Vanguard, which operates the Alamo and National brands and has 10,000 employees in 82 countries.
Last week, Dollar Thrifty announced it would cut up to 200 jobs at its Tulsa call center and outsource the positions to PRC of Fort Lauderdale, Fla.