The Avis Budget group has been asked by the U.S. Federal Trade Commission to provide additional information for its takeover bid for Dollar Thrifty.

Avis, the second largest car hire company in the US, has declared that it will cooperate with the FTC at all stages of the process of the takeover bid, which has entered its due diligence phase of the potential transaction. Lawyers representing Avis have claimed that the request from the FTC is just part of the overall process and that it should not be interpreted in any way.

Rival car rental giant Hertz is also attempting to woo Dollar Thrifty, with the third largest car hire group in the US looking to displace Avis, who in turn is trying to consolidate its position as a competitor to leading group Enterprise, which owns roughly 31 per cent of the US market.

Industry analysts have been questioning whether the Avis bid, which was launched after the Hertz bid, could stumble when it came to gaining approval from antitrust authorities. The media and industry speculation has hurt Avis, with shares falling by almost 30 per cent in the past month, meaning that the group would most likely have to use cash to complete the transaction given its stock options have dwindled. Market analysts suggest that investors are waiting for the green light before returning to the Avis shares, with high volatility expected until the deal is completed.

A stock-based option remains the most credible form of deal, with Hertz still the favourite to win the battle. Stocks are also seen as an attractive entry point for any investors, with improvements in air traffic trends seen as a key to the future car rental industry.