This morning there was an SEC filing from Hertz Global Holdings (HTZ-NYSE) showing that the company is selling yet another 45 million shares, or at least its holders are. The company is not receiving any of the proceeds, and all proceeds are going to affiliates of Merrill Lynch.
So with 45 million shares coming out and 320+ million shares outstanding after the offering, one would wonder why shares are only down 0.2% on that active trading volume. The truth is that this has been anticipated and there may be even more shares in the coming months as insiders take their exits.
The post-IPO shares have actually done very well having been up as much as 50% at one point before a recent sell off. perhaps the most interesting point about Hertz is that the street has been looking to this as the classical private equity exit from a gone-private deal back into an IPO. This was the classic "large club private equity deal" with the selling shares at the IPO being used to compensate the private equity groups and with a rather large pre-IPO dividend. If companies this size are going to perform this way on a static basis then you might as well start expecting more of those 2005 and 2006 private equity buyouts to come public again.
Jon C. Ogg
May 21, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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