Moody's Puts Hertz Rating On Watch For Downgrade On Raised Bid

Moody's Investors Service put its ratings on Hertz Global Holdings Inc. (HTZ) on watch for possible downgrade after the rental-car giant on Sunday raised its offer for Dollar Thrifty Automotive Group Inc. (DTG) to $50 a share, or about $1.56 billion.

That bid topped a proposal from Avis Budget Group Inc. (CAR), which on Sept. 2 raised the cash portion of its cash-and-stock offer to about $47.13 a share, or about $1.35 billion, exceeding Hertz's then-proposal of about $1.1 billion.

The rating agency said the acquisition would result in considerable strategic and financial benefits for Hertz eventually, but funding it could strain the company's credit metrics at the current level. That risk is increased by the bidding competition between Hertz and Avis, the firm said.

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- Posted: 2010-09-13 22:02:13

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