The Work

July 29, 2010 3:46 PM

Rental Car Wars: Five Firms On Hand As Avis Tries Harder for Dollar Thrifty

Posted by Brian Baxter

Avis Budget Group is living up to its famous slogan--"We Try Harder."

The car rental giant announced a $1.3 billion offer for Dollar Thrifty Automotive Group late Wednesday, topping a $1.2 billion bid put forth by rival Hertz Global Holdings in April.

Avis's expected offer does not include a breakup fee or matching rights--components of Hertz's bid criticized by Avis chairman Ronald Nelson in a letter to Dollar Thrifty. Supporters of the Avis bid claim that its antitrust covenant is stronger than Hertz's. Lawyers representing Avis and Hertz are now preparing for battle as the two companies vie for control of Tulsa-based Dollar Thrifty, the nation's fourth-largest car rental company.

As previously reported by The Am Law Daily, Hertz has turned to lawyers from Debevoise & Plimpton and Jones Day to advise on its offer for Dollar Thrifty. The team from Debevoise, which advised three private equity firms acquiring Hertz from Ford for $5.6 billion in September 2005, is led by M&A partner John "Jack" Allen, Jr., who advised Hertz on an IPO the following year.

Jones Day antitrust partner Joe Sims, a former American Lawyer Dealmaker of the Year for his work on the satellite radio merger between Sirius and XM, is serving as lead antitrust counsel to Park Ridge, N.J.-based Hertz.

In April, Hertz CEO Mark Frissora told investors he was confident that regulators would approve his company's acquisition of Dollar Thrifty, despite years of consolidation in the rental car industry.

"We have hired lawyers that actually were former FTC people and feel good that we will get this deal done and that [regulatory approval] is not an issue," Frissora said in a conference call announcing Hertz's initial bid for Dollar Thrifty.

But shareholder suits were filed against Dollar Thrifty in Oklahoma and Delaware protesting the price of the company's proposed sale to Hertz, with investors claiming management could have received more in the stock-and-cash acquisition proposed by Hertz.

Now Avis has turned to some well-regarded M&A and antitrust veterans to push Hertz aside and move forward with its own bid for Dollar Thrifty, which, as noted by The New York Times's Deal Professor, is about 17 percent more than Hertz's.

Kirkland & Ellis M&A partners David Fox and Daniel Wolf--who both joined the firm in May 2009 after defecting from Skadden, Arps, Slate, Meagher & Flom--are serving as lead counsel to Avis on its revised offer for Dollar Thrifty. Kirkland's Mark Kovner is serving as co-antitrust counsel to Avis along with Arnold & Porter antitrust chief William Baer and partner Deborah Feinstein.

Baer and Feinstein currently are advising General Electric and NBC Universal on the latter's proposed sale to Comcast (that deal recently received approval from the European Commission and is awaiting a similar endorsement from the Justice Department and FCC).

Kirkland's Fox and Wolf have had a busy year since leaving Skadden, taking clients like Avis with them to their new firm and pushing aside other firms to score a role advising Teva Pharmaceuticals on its $5 billion acquisition of German generic drugmaker Ratiopharm earlier this year.

Dollar Thrifty, which is being advised by Cleary Gottlieb Steen & Hamilton M&A partners Paul Shim and Matthew Salerno, said in a statement that it is reviewing the Avis offer.



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