CHICAGO -

In late breaking news out Thursday, Dollar Thrifty Automotive Group’s shareholders voted against a merger with Hertz.

According to Bloomberg, the vote came in at 13.8 million shares against the Hertz bid, compared with 11.8 million shares in favor. The vote took place during a special meeting in Chicago that began at 11 a.m. and didn’t conclude until after 2 p.m.

In response to the vote, Dollar Thrifty released a statement that confirms Bloomberg’s numbers. Management said the final results were certified by IVS Associates. There were a total of 4,735 abstentions.

Scott Thompson, president and chief executive officer of Dollar Thrifty, said, "We respect the vote of our shareholders and remain confident in our ability to continue to deliver outstanding value for them. The Dollar Thrifty board and management team are focused on building on our track record of superior operating performance to drive continued growth.

"We will evaluate all of our options going forward in order to maximize value for Dollar Thrifty shareholders," he added.

In a statement released a day prior to the vote, Hertz revealed that if it lost its bid for the company, a new offer would not be forthcoming.

Mark Frissora, Hertz chairman and CEO, said, “While answering Dollar Thrifty shareholder questions today, I confirmed four immediate steps Hertz will take if stockholders vote ‘no’ on our merger agreement.”

According to the CEO, Hertz planned to:

—Immediately terminate the merger agreement, taking the $50 per share offer permanently off the table.

—End all efforts to acquire Dollar Thrifty.

—Stop the process of selling Advantage, Hertz’s deep-value leisure brand.

—Withdraw the company’s antitrust application from the Federal Trade Commission.

Not long after Hertz’s statement, Avis Budget Group, which has also been vying for a chance to acquire DTAG, revealed that if shareholders voted no, it would continue to actively pursue the acquisition of DTAG, which includes commencing an exchange offer no later than 10 business days after the meeting.

At its essence, Avis said in a statement out Wednesday, “Hertz has today (Wednesday) stated that if Dollar Thrifty stockholders reject the Hertz merger, Hertz will end all efforts to acquire Dollar Thrifty. Based on this commitment, Avis Budget is now prepared to agree to pay a reverse termination fee of $20 million in a merger agreement with Dollar Thrifty.”

The statement went on to say, “Avis Budget has always said that as long as Hertz had matching rights, Avis Budget would not consider a reverse termination fee. Now that Hertz has in effect eliminated those matching rights, Avis Budget is prepared to offer such a fee.”

The company also intends to actively pursue antitrust clearance. Avis Budget committed to sell assets representing $325 million of revenues (of which not more than $250 million are U.S.), which is designed to show management’s commitment to gaining antitrust approval.

“Avis Budget will commit to sign the merger agreement previously provided, with an additional provision to assure that Hertz honors the commitments made in its statement,” Avis also said in its statement.

“In light of continuing questions related to reverse termination fees, Avis Budget will agree to pay a $20 million reverse termination fee in the merger agreement with Dollar Thrifty,” officials said.

As of press time, only DTAG had issued a statement.

Shedding a bit of light on a possible reason why shareholders voted against the Hertz merger despite DTAG management’s recommendation, a report came out earlier this week that PAR Capital Management, one of DTAG’s top shareholders, had planned to vote no at the shareholders meeting.
Apparently PAR’s president believes the merger with Hertz “doesn’t fully compensate” shareholders for the value of DTAG.