Hertz Spin-Off News Gives Stock a Needed Boost

Services

Published: March 17, 2014 1:20 pm

News that Hertz Global Holdings Inc. (NYSE: HTZ) will spin off its construction equipment rental business pleased investors, who pushed shares sharply higher after the opening bell Monday. The Financial Times reported on Friday evening that the spin-off deal valued the unit at about $4.5 billion.

The construction equipment rental business accounted for $1.1 billion of Hertz’s revenue in the first nine months of 2013. The company had explored a spin-off to shareholders or a reverse Morris trust, which is a combination of a spin-off and a merger. The New Jersey-based rental company also was rumored to be talking with potential merger targets.

In an apparent attempt to ward off pressure from billionaire investor Carl Icahn, the company enacted a poison pill near in December of 2013, following consultation with its outside advisers, Bank of America Merrill Lynch and Barclays. However, Icahn later denied having a stake in or targeting Hertz.

Details of the potential spin-off of the equipment business announced Friday could be released as early as this week, according to the Financial Times. Hertz is slated to report fourth-quarter earnings Tuesday before the market opens.

Shares of competitor Avis Budget Group Inc. (NASDAQ: CAR) were down slightly in early afternoon trading.

Hertz shares opened at $28.01 Monday morning, up more than 7%, and they were trading around $27.30 in the noon hour. Shares are now down less than 5% year to date and have traded between $19.73 and $29.81 in the past year.

The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%¹ today. Checking accounts are even worse.

But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.