Less than a year after going private, Hertz Global Holdings last week set a price range of $16 to $18 per share for an initial public offering of 88.2 million shares, about 27 percent of the company. If able to command $18 per share, the Park Ridge, N.J.-based car rental company — whose equipment rental unit, Hertz Equipment Rental Corp. is No. 3 on the RER 100 list of largest equipment rental companies — could raise nearly $1.6 billion through the offering.
Hertz was acquired from Ford Motor Co. by a group of private equity companies including Clayton, Dubilier & Rice, Carlyle Group and Merrill Lynch Global Private Equity. Ford had owned Hertz since 1994.
Net proceeds to Hertz from the offering are expected to be about $1.43 billion and will be used to repay borrowings and to pay related transaction fees and expenses. The company said it will pay a special cash dividend, at about $1.83 per share, or $426.8 million before the offering with the bulk going to the equity funds.
During the six months ended June 30, Hertz said it lost $31.4 million, or 14 cents per share, compared with a profit of $120.1 million, or 52 cents per share, during the same period a year ago.
Underwriters could choose to sell an additional 13.2 million shares now held by the equity groups, which would bring the IPO value to $1.8 billion.
According to SEC filings, Hertz’ owners paid an average of $9.99 per share for the company, which could mean an 80 percent gain.
The offering is being made through an underwriting syndicate including Goldman Sachs, Lehman Brothers, Merrill Lynch, Deutsche Bank and JP Morgan, Morgan Stanley, Credit Suisse, UBS Investment Bank and Wachovia Securities.
