Hertz (HTZ) Agrees to Give Icahn 3 Board Seats
Park Ridge, New Jersey based Hertz Global Holdings is an international car rental company with over 10,400 rental locations in roughly 150 countries worldwide.
Shares of Hertz Global Holdings Inc. (HTZ) were up +1.25 or +4.50 percent to $29.00 per share in premarket trading on Friday, after news that the company has agreed to give activist investor Carl Icahn three seats on its board of directors in exchange for avoiding a potential battle for control of the board. Hertz Global Holdings stock closed up +0.05 or +0.18 percent to $27.75 in Thursday's regular trading session.
Late Thursday, Hertz arrived at an agreement in principle with Icahn to give the activist investor three seats on the company's board, as well as to amend a shareholder rights plan otherwise known as a poison pill to safeguard the company from any single investor gaining too much power without the board's approval. The amendment will raise the plan's trigger from 10 percent ownership to 20 percent.
On August 20th, Icahn reported an 8.5 percent stake in Hertz Global Holdings. Icahn spent roughly $470.5 million for the 38.8 million shares he had acquired, according to a filing with the Securities and Exchange Commission.
At the time, Icahn said he would put pressure on the company's management over operational failures and accounting issues after Hertz announced it was withdrawing its full year forecast due to a shortage of vehicles, an accounting error and a recall from the auto industry.
The three men which will represent Icahn on Hertz's board are Samuel Merksamer, Daniel A. Ninivaggi and Vincent J. Intrieri. Two of the new board members will assist in finding a new Chief Executive, after the company announced earlier in the week that the current CEO, Mark Frissora was leaving the company for "personal reasons .
After the news, Icahn said in a statement, "I would like to thank the Hertz board for acting so expeditiously in agreeing to appoint our three very capable nominees to the board; I believe Hertz is a great company and a great brand and that the right new CEO will return it to its former glory.
Hertz Global Holdings stock reached its yearly high of $31.61 the day before the company withdrew its full year guidance on August 20th. The stock has since declined, recovering some of its losses with this morning's move. The addition of three Icahn representatives to the board has potential benefits for all of Hertz's shareholders, with Icahn's commitment to maximizing shareholder returns.
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