Dollar Rent A Car 2011 Annual Report Download - page 87

During the first and second quarters of 2011, the Company incurred $3.5 million and $1.1 million, respectively, in merger-related expenses. See Note
17 for further discussion.
During the fourth quarter of 2010, the Company recorded favorable changes in vehicle insurance reserve estimates of $13.4 million in conjunction with
receiving actuarial updates on its vehicle insurance programs. See Note 14 for further discussion.
During the first, second, third and fourth quarters of 2010, the Company incurred $1.7 million, $6.9 million, $11.9 million and $2.1 million,
respectively, in merger-related expenses. See Note 17 for further discussion.
In 2010, the majority relating to the third quarter, the Company wrote off $1.1 million (pretax) primarily related to software no longer in use and to
impairments of assets at its company-owned stores.
17. PROPOSED ACQUISITION AND RELATED MATTERS
In late February 2011, the Company submitted its certification of substantial compliance with the Second Request of the U.S. Federal Trade
Commission (“FTC”) relating to a potential acquisition of the Company by Avis Budget.
On May 9, 2011, Hertz announced its plans to commence an exchange offer to acquire the Company. On May 24, 2011, HDTMS, Inc., a wholly
owned subsidiary of Hertz, commenced an exchange offer to exchange each of the issued and outstanding shares of the Company’s common stock for
(i) $57.60 in cash, without interest and less any required withholding taxes, and (ii) 0.8546 shares of common stock, par value $0.01 per share, of
Hertz common stock (the “Exchange Offer”). The Exchange Offer had an expiration date of July 8, 2011; however, Hertz extended the Exchange Offer
through November 1, 2011. On October 27, 2011, Hertz announced that it was withdrawing its Exchange Offer for all outstanding shares of the
Company, in light of the Company's plan to commence its announced share repurchase program and current market conditions. However, Hertz noted
that they remain interested in acquiring the Company and remain engaged with the FTC to secure antitrust clearance for a proposed transaction.
On August 21, 2011, the Company issued a letter advising Hertz and Avis Budget of the Company's intention to solicit for submission in early
October 2011 best and final definitive proposals regarding a potential business combination. In its letter, the Company stated that any proposal that
did not eliminate the antitrust regulatory risk of the transaction for its shareholders would not likely be acceptable. In conjunction with the Company’s
request for final proposals regarding a potential business combination on September 14, 2011, Avis Budget announced that it would not participate in a
bid to buy the Company, citing current market conditions.
As of October 10, 2011, the Company had not received any proposals meeting this criterion and announced that it has formally concluded its process
to solicit definitive proposals regarding a potential business combination. Consequently, the Company has terminated its solicitation process and will
continue to execute its current stand-alone plan.
Pending litigation relating to the now terminated merger agreement is described in Note 14.
18. SUBSEQUENT EVENTS
In preparing the consolidated financial statements, the Company has reviewed events that have occurred after December 31, 2011 through the issuance
of the financial statements. The Company noted no reportable subsequent events other than the subsequent events noted in Notes 8 and 13.
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