Avis has upped the ante in its efforts to purchase Dollar Thrifty Automotive Group by increasing its initial offer from $39.25 per share to $40.75, raising the total cash bid to $1.36 billion. The company also announced it would not pay for the breakup fee if Dollar Thrifty terminates the agreement with Hertz, who earlier this year posted a $1.1 billion cash and stock offer to purchase the budget car rental group.

Dollar Thrifty chief executive Scott Thompson issued a request to Avis Budget Group earlier this month to match or increase the estimated $50 million in breakup fees that his company would have to pay if it terminates the deal with Hertz. In a statement made by an Avis representative, the firm said that the breakup fee does not have any significant affect on the certainty of closing the deal, and Avis will not contribute any financial resources to pay for the loss.

The Avis statement went on to say that Hertz should be responsible for absorbing the costs resulting from any potential termination of the deal, and that it will instead increase its offer for Dollar Thrifty by the equivalent reduction in breakup fees. Dollar Thrifty shareholders are expected to vote on the proposed Hertz deal later this month.

Dollar Thrifty Automotive Group has announced second quarter profits to be higher than previous estimates, as the firm enjoyed earnings-per-share (EPS) of $1.26, 10 cents greater than the $1.16 analysts had forecast. The budget car hire giant expects growth to continue over the second half of the year and predicts four to five per cent revenue growth during that time, over double the two per cent growth the firm saw during the first six months of 2010.

Scott Thompson, chief executive for Dollar Thrifty, said that since May, his firm has experienced profitable revenue growth, and that the company enjoys a solid reservation book. He went on to add that Dollar Thrifty should enjoy continued success throughout the year, as the travel industry as well as the overall economy has shown signs of expansion.

Dollar Thrifty is currently the centre of a takeover bid by both Hertz Global Holdings Inc and Avis Budget Group. The two firms are keen to bring the budget clients which Dollar Thrifty caters to under their respective corporate umbrellas, with Hertz offering to purchase the firm for $1.2 billion, followed by Avis’s offer of $1.3 billion. Although both Hertz and Avis have shown interest in purchasing Dollar Thrifty, industry analysts argue that overcoming antitrust hurdles may prove the most daunting task prior to the acquisition by either company.