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SAC’s Cohen Takes a Piece of Dollar Thrifty

Filings suggest this activist investor may not be hands-off.

Stevie Cohen has taken a sizable stake in Dollar Thrifty Automotive Group, the car rental company that is the target of a takeover tug-of-war.

Cohen’s SAC Capital said on Tuesday it now owns more than 1.66 million shares, or 5.8 percent of the total outstanding of Dollar Thrifty. They include more than 1.4 million shares that he would receive if he exercised call options.

The filing was made on behalf of SAC Capital Advisors LP, SAC Capital Advisors Inc., Sigma Capital Management and Cohen.

On one hand, this position is no big deal. It is not unusual for Cohen, one of the most active traders, to accumulate large stakes in companies, and then dump them a short time later.

In fact, this year he has already filed a couple of dozen 13-G’s, including updates, which are reserved for passive stakes of at least 5 percent of companies.

However, in the case of Dollar Thrifty, Cohen filed a 13-D, which means he owns at least 5 percent of the stock, but it is not just for investment purposes only. This is unusual for Cohen. So far this year, this is only the second 13-D SAC has filed. Rather, he left open the possibility of taking some sort of aggressive or activist role.

A spokesman wouldn’t comment.

In the filing, Cohen says he may engage in discussions with management, the board of directors, other shareholders and other important parties about the business, operations, governance, management, strategy and future plans of the company, and write letters to the board, management or representatives, other shareholders and other persons.

Of course, this is partly boiler-plate stuff. But, what he is basically saying is if he doesn’t like how the merger negotiations are going he may step up and do something about it.

On April 26, Hertz Global Holdings agreed to acquire Dollar Thrifty for $41 per share, in a mix of 80 percent cash and 20 percent Hertz common stock, to create Hertz Dollar thrifty, or whatever they plan to call it.

Then in late July Avis Budget Group made an unsolicited offer to acquire Dollar Thrifty for $39.25 in cash and 0.6543 share of Avis Budget stock per Dollar Thrifty share to create Avis Budget Dollar Thrifty, or something like that. Its offer was valued at the time at $46.50 per share.

Last week, Dollar Thrifty responded to Avis Budget’s offer. In its letter to Avis, it actually said the offer met two of its three required pre-conditions — it was more favorable financially and it is supported by financing that is fully committed or reasonably likely to be obtained.

So, what’s the problem? Dollar Thrifty is concerned that a deal is not reasonably expected to be completed on a timely basis, in part due to possible antitrust problems.

These are real concerns. Anyone who has tried to rent a car lately — myself included — could tell you the definition of sticker shock.

Meanwhile, Dollar Thrifty’s stock closed Tuesday at $48.12. So far, Cohen has enjoyed mixed success, having paid between $40 and $49 per share for his stake since June 11.

I’m betting Cohen, who probably has not rented a car from any of these companies in decades, will make sure some sort of deal is done at the highest possible price.

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