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Tickers in this Article: DTG, CAR, HTZ
Shares of Oklahoma-based car rental company Dollar Thrifty (NYSE:DTG) have been on a roll and the company has been receiving a great deal of press. In late April, Hertz Global (NYSE:HTZ) agreed to purchase the company for a premium. But Dollar Thrifty is still in play.

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Why Dollar Thrifty Could Bring Big Bucks
Right now the economy is just beginning to recover, and few are bullish on the near-term outlook for the car rental space. However, as the domestic economy hits its stride, business travel and leisure travel should pick up and so should demand for rental cars and other travel-related goods and services. If someone was interested in making a bid for a car rental company, now is probably a pretty good time.

However, don't expect the Dollar Thrifty saga to end quickly. Avis Budget (NYSE:CAR) issued a press release on May 3 showing a letter that its chief executive Ronald Nelson to DTG's chief executive. In that letter Nelson said, "We would like to make a substantially higher offer to acquire Dollar Thrifty, especially in light of your recent performance and the potential synergies associated with an acquisition of Dollar Thrifty by Avis Budget."

Dollar Thrifty seems like it may end up in the driver's seat as two well-known companies with solid reputations may end up in a bidding war over DTG.

For what it's worth, the company has some attractive features. For one, data indicates that it has beaten estimates in all of the last four quarters. In addition, it is expected to earn $2.30 a share this year and is expected to grow 10% per annum in the next five years. If $2.30 is achieved, it would be pretty exciting given the still lackluster domestic economy and travel environment. It raises the question of what type of bottom line the company might achieve in a more normal economic environment. All of this may make the company more attractive to would-be suitors.

Where from Here?
Avis Budget could come in with an offer in the mid $50s to $60s. If that were to happen, Hertz would have to decide whether to fish or cut bait, and it's entirely possible that it might raise its bid. In any case, in the near-term the DTG shares could lift from their current $50 and change level.

The Bottom Line
Dollar Thrifty is likely to continue to make headlines and it could end up having two would-be suitors competing for it. Avis could still come in with an offer more than 10% above the current price. (For related reading, take a look at What Makes An M&A Deal Work?)

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