Hertz Holders Subsidizing Private Equity, Again (HTZ)

Hertz Global Holdings, Inc. (HTZ-NYSE) announced that the offering by certain of its stockholders of 51.75  Million shares of its common stock, including 6.75 Million shares including the overallotment, was priced at $22.25 per share. The 51.75 Million shares will be sold by private equity funds associated with Clayton Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity.

The truth is that these shares are significantly above their IPO.  Wall Street saw the first true buyout-sellback deal here on a leveraged basis where dividends and reparations were made immediately before the IPO and Wall Street keeps buying these shares back at unbelievably higher and higher prices.

There are two prevailing thoughts here, and they might both be right.  Either you want to buy every big leveraged re-IPO from private equity OR you have to think there is some collusion pushing Private Equity Boulevard onto Wall Street so it can be sold higher on Main Street.  You make the call.

Jon C. Ogg
June 13, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.