News Column

Dollar Thrifty Executives Opt Out After Acquisition by Hertz

Dec. 20, 2012

D.R. Stewart

Several top executives, including CEO Scott Thompson and Chief Financial Officer Clifford Buster, resigned their positions Wednesday at Tulsa-based Dollar Thrifty Automotive Group Inc., officials said.

The Dollar Thrifty executives did not issue statements, and they could not be reached for comment.

The resignations are voluntary, however, and they occur a month after Dollar Thrifty was acquired for $2.3 billion by Hertz Global Holdings Inc. of Park Ridge, N.J., Hertz executives said.

Hertz spokesman Richard Broome said Thompson and Buster took the option offered in the companies' merger agreement to leave the company 30 days after the acquisition was completed.

Thompson and Buster have been retained as consultants by Hertz, Broome said.

An internal memo about the executive changes and an outline of the new organizational structure to run day-to-day operations at the rental car company was distributed to Dollar Thrifty employees on Wednesday, Broome said.

Hertz executives said they will announce organizational changes within 90 days and complete the merger and integration of the two companies within 180 days.

"Scott and Cliff did a great job running the company, bringing it out of the recession, and they have been very helpful to us in the acquisition and closing the deal," Broome said.

In recent weeks, Thompson said he intends to remain in Tulsa and look for other business opportunities. He said he likes the pace of the community and the friendliness of the people compared with Houston, from which he moved to Tulsa in 2008.

Trained as an accountant and manager, Thompson was one of the founders of Group 1 Automotive Inc., a Fortune 500 company with more than $5 billion in revenue. He retired from Group 1 in 2005.

He was hired as CFO at Dollar Thrifty in May 2008. That fall, he was named chief executive.

Thompson began his reign as CEO boldly, slashing management ranks, closing unprofitable rental car locations and reworking vehicle purchase and sales deals.

He had to act boldly, Thompson said, because the wolves were at the door.

When he took over as CEO, Dollar Thrifty's stock was at 97 cents a share, the company was in default of its loan agreements and it was headed for an annual loss of $350 million.

Thompson said he had a three-year turnaround plan, but because of the response of employees and some shrewd financial and vehicle deals, the company began rising within a year and was the talk of the industry in two years.

Hertz made its first, $41-a-share $1.27 billion offer for Dollar Thrifty in April 2010.

At the time, Hertz was the country's second largest rental car operator to Enterprise Rent A Car, Avis Budget Group was No. 3 and Dollar Thrifty was fourth.

Avis Budget made a $1.33 billion offer in July 2010, which it increased to $1.52 billion in September. Hertz's "best and final" $1.45 billion offer on Sept. 24, 2010, was rejected by Dollar Thrifty shareholders a week later.

Hertz returned again in May 2011 with a $72-a-share $2.25 billion bid, but it later withdrew it in the face of unfavorable economic conditions.

Thompson never believed Hertz had given up the chase. He thought Hertz CEO Mark Frissora saw Dollar Thrifty as a perfect complement with its "leisure value" niche to Hertz's premium corporate and business strengths.

Thompson was right.

In August, Dollar Thrifty's board of directors agreed to accept Hertz's $2.3 billion $87.50-a-share offer.

And now the architect of the turnaround is looking for his next project.


Distributed by MCT Information Services

Source: (c) 2012 Tulsa World (Tulsa, Okla.)

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