Hertz Spin-Off News Gives Stock a Needed Boost

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By Trey Thoelcke Published
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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.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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