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Investing

Hertz: M&A With A Brain

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By Douglas A. McIntyre Published
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The president of PAR, which owns 7.7% of the shares in Dollar Thrifty (NYSE: DTR), told The Wall Street Journal that his fund will vote against a Hertz offer to buy the smaller company. The cash and stock offer is worth about $51 a share.

Hertz has said that it will call off the deal if Dollar Thrifty shareholders do not approve it.

Avis (NYSE: CAR) has made a slightly higher offer for Dollar Thrifty, but that offer is in limbo until a vote by Dollar Thrifty shareholders.

The Hertz announcement is one of the few sane proclamations in what has become a period of frenzied M&A activity. Many companies that have made offers are willing to pursue them against stiff odds and in some cases will raise offers to box out rivals.

BHP Billiton (NYSE: BHP) is hell-bound to complete a transaction for Potash (NYSE: POT) even at a price well above where the Canadian company traded just a few weeks ago. Dell  (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) engaged in a furious bidding war for 3PAR that raised the price of the target again and again until it reached a nearly insane level compared to the balance sheet and profits of the company.

Hertz is an example, albeit a rare one, that the cheap money available to companies and the high stock prices of acquirers are not enough to take a deal to irrational extremes.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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