September 30, 2010
Dollar Thrifty Vote Goes Down
This is a big week for newsworthy shareholder votes! Dollar Thrifty shareholders voted down the Hertz offer today (from Bloomberg):
The vote at the special meeting in Chicago today was about 13.8 million shares against the Hertz bid, versus 11.8 million shares in favor.
Only 41% of the outstanding shares were voted in favor of the Hertz deal.
For weeks Avis had refused to give Dollar Thrifty a reverse termination fee with an anti-trust/regulatory trigger - until yesterday when they offered up a $20 million fee. To be honest, the 1.3% fee that $20 million represents is nothing compared the damage that might be suffered by Dollar should Avis walk away in the event of regulatory challenges. I know that the reverse termination fee has been a big sticking point with the Dollar board, but given the small size of the one finally offered up by Avis, I can't imagine that the reverse termination fee was really driving many votes. If you think about a reverse termination fee as an equivalent to a liquidated damages provision paid to the seller in the event the buyer is unable to complete the deal, even the $44 million offered up by Hertz was probably much too small.
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