Hertz (HTZ) Board Approves Company Separation, Icahn Increases Stake
Shares of Hertz Global Holdings, Inc. (HTZ) were trading up +0.30 or +2.79 percent to $11.07 per share in Tuesday’s premarket. The rise in the stock came after news broke yesterday that the company’s board had approved the separation of the company’s car rental and equipment rental units and set a record date. In addition, Carl Icahn boosted his stake in the company to 15.24 percent according to an SEC filing dated June 6th. Hertz Global Holding stock closed at $10.77 per share, up +0.72 or +7.16 percent in Monday’s regular trading session.
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.
In a press release yesterday, Hertz Global Holdings, Inc. announced its board’s formal approval of the separation of the company’s car rental and equipment rental businesses into two separate public companies. The car rental business, currently operating under the name Hertz Rental Car Holding Company, will be renamed to Hertz Global Holdings Inc. while the equipment rental business will be renamed Herc Holdings Inc.
The company plans to separate the two units through a dividend distribution. Shareholders of record on June 22nd will receive one Hertz Rental Car Holding share for every five shares of Hertz Global Holdings Inc. owned. Every share of Hertz Global Holdings Inc. will represent one Herc Holding share; however the shares will be adjusted for a 1-for-15 reverse stock split which will be immediately implemented once the separation takes place.
President and Chief Executive Officer of Hertz Global Holdings, John Tague, said in the company’s press release that “This separation marks the culmination of considerable work by our leadership team over the past 12 months. While developing and implementing a multi-year margin improvement plan for our rental car business, we installed a strong, experienced management team at Herc and worked with them to strengthen the fundamentals of its equipment rental business. We recently completed the selection of an experienced board of directors and facilitated creation of a capital structure with the requisite financing to support the business. Both businesses are now well-positioned to realize their full potential.”
Tague will continue in his role as President and Chief Executive at Hertz Global Holdings after the transaction is completed. The dividend distribution is expected to be completed on June 30th, 2016 and is subject to all applicable conditions. On July 1st, 2016, Hertz Global Holdings will begin trading on the New York Stock Exchange under the symbol HTZ, while Herc Holdings will begin trading on the NYSE under the symbol HRI.
In related news, Carl Icahn, in a filing with the SEC reported he has increased his stake in Hertz Global Holdings to 15.24 percent from 14.34 percent reported on December 7th, 2015.
Other News About HTZ
Board of Directors for Herc Holdings Inc. Set Following Separation from Hertz Rental Car Business
Hertz Holdings has named the board of directors of the new equipment rental company.
Hertz Global Holdings Announces Pricing of Private Offering of $848.4 Million Medium Term Rental Car Asset Backed Notes
Company uses the Hertz Vehicle Financing II LP platform to finance its U.S. rental car fleet.
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