Investing

Hertz: M&A With A Brain

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

Find a Qualified Financial Advisor (Sponsor)

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.