The counter offer from Avis Budget Group for Dollar Thrifty faces a difficult road ahead say analysts.

With Avis having launched its due diligence, all sides have now fallen silent. However, the recent economic instability means the offer will be harder to finance, and the falling stock price means an Avis share bid could also present difficulties.

Bill Kavaler, analysts with Oscar Gruss, thinks these factors will force Avis into spending more cash than originally intended. However, Dollar Thrifty has already questioned the ability of Avis to counter in cash the Hertz offer of $1 billion. They have also claimed that substantial funding and the required shareholder approval would slow the process and cast new questions on the financial stability of the offer; something which could be seen as an investment risk.

The volatility of the stock market has also left many analysts dubious of any stock offer. Shares with Avis have fallen by 27 per cent since the announcement of their bid, with Avis’s market capitalisation standing now at $1.1 billion, compared to the Hertz share of $4.2 billion.

The current bid from Hertz is worth around $39.67 per share, though shares in Dollar Thrifty have grown to $45.45, as expectant brokers anticipate a bidding war. Hertz can outlast its competitors due to its size, so is thought likely to stand the best odds in a lengthy battle. No other bids are expected, despite Dollar Thrifty being one of the few profit-making car rental companies in the past year.