Hertz shares up on ‘poison pill’ plan

Hertz Global Holdings rose to a record high after the largest publicly-traded US rental-car company said it adopted a so-called poison pill upon seeing “unusual and substantial activity” in its stock.

Hertz shares climbed 8.3% to $28.06 (€20.36). The board voted unanimously for the one-year shareholder-rights plan, which Hertz said wasn’t adopted in response to any specific takeover bid or proposal to acquire the company, according to a statement yesterday.

Dan Loeb’s Third Point LLC has taken a stake in Hertz and does not intend to take an activist role, CNBC said.

Under the plan, Hertz will issue one preferred share purchase right for each share of common stock at close of business on Jan 9. The rights will not be exercisable until 10% of Hertz common stock is acquired by one person or group, excluding passive institutional investors, in which case the threshold is 15%.

Hertz gained unprecedented pricing power after its $2.3bn acquisition of Dollar Thrifty Automotive Group in July.

Hertz’s improving prospects drove shares up 59% in the past year, while the Standard & Poor’s 500 Index rose 29% and Avis shares almost doubled.

Hertz didn’t specify in its statement what kind of unusual activity it has observed in its stock.

It said the poison pill plan is aimed at “reducing the likelihood that any person or group would gain control of Hertz through open market accumulation without appropriately compensating the company’s shareholders for such control or providing the board sufficient time to make informed judgments”.

Bloomberg