Avis Budget Group Inc. said it would abandon its $1.56-billion bid to acquire Dollar Thrifty Automotive Group Inc., leaving Hertz Global Holdings Inc. as the lone remaining suitor.
"We have decided not to pursue a transaction at this time in light of current market conditions," Avis said Wednesday in a regulatory filing. The Parsippany, N.J., rental-car company also is trying to raise money in the debt markets to finance its acquisition of Avis Europe for $1 billion.
Feedback from potential debt investors on the difficulty of funding two large acquisitions may have caused Avis to drop its larger bid, said Bill Kavaler, an analyst at Oscar Gruss & Son Inc. The decision may increase the chances that Dollar Thrifty, after resisting advances for 15 months, will reopen talks with Hertz about its bid, worth $1.95 billion.
"Avis was in there not as a spoiler but as support to make sure that Hertz didn't try to get Dollar Thrifty too cheaply," Kavaler said. Hertz buying Dollar Thrifty "is not in the bag. They still need to negotiate with the Dollar Thrifty board."
Rich Broome, a spokesman for Hertz, said Avis' decision changes nothing for Hertz, which remains focused on getting its offer approved by the Federal Trade Commission. He declined to comment on when the company could possibly receive FTC approval.
Avis shares rose 74 cents, or 6.3%, to $12.48. Tulsa, Okla.-based Dollar Thrifty rose 34 cents to $65.04, while Park Ridge, N.J.-based Hertz gained $1.35, or 13.5%, to $11.37.
Dollar Thrifty is the fourth-largest U.S. rental-car chain. It trails Enterprise Holdings Inc., Hertz and Avis.