Boston, MA 01/02/2013 (wallstreetpr) – Hertz Global Holdings, Inc. (NYSE:HTZ) moved swiftly to adopt a shareholder rights plan to protect itself from a hostile takeover as the management saw an unusual and substantial activity in its shares. The plan will kick in once a person or a group acquires more than 10 percent of the company’s common stock.
Investor Daniel Loeb behind the move?
Though the company stated that this was not in response to any specific bid, it appears that the recent interest shown by Daniel Loeb could be behind this move. Daniel Loeb, through his hedge fund; Third Point Capital has increased his stake in the company recently. Though the stake is less than 5% currently, he may purchase more shares to consolidate it in the future. Third Point Capital holds more than 7% stake in Sony Corporation (ADR)(NYSE:SNE) and is building pressure on Sony to restructure by hiving off its entertainment division. This may have spoofed of the management of Hertz Global Holdings, Inc. (NYSE:HTZ) into adopting the shareholders rights plan. However the ‘poison pill’ wordings reveal something else. Hertz has not taken this step to prevent a hostile takeover but has taken this step to ensure that activist investors are not able to exert pressure on the company to deviate from its plans. It is trying to protect itself from the situation Sony Corp (ADR) (NYSE:SNE) and many other companies have landed themselves in.
Dollar Thrifty takeover
The company has also been successful in completing the takeover of Dollar Thrifty in a deal valued at $2.6 billion. Hertz faced serious competition from Avis Budget Group Inc. (NASDAQ:CAR) but was ultimately successful in taking over the company engaged in the leisure market car rentals. The acquisition is expected to help consolidate Hertz’s position substantially. Both Avis and Hertz are locked in a fierce battle for market share in the competitive car rentals market.
The investors seem to be making hay. The stock of Hertz Global Holdings, Inc. (NYSE:HTZ) climbed more than 10% on December 31, 2013 to close at $28.62 per share.
