Hertz float may raise $600m

Ford yesterday announced plans to float Hertz, the world's biggest car rental company, in a deal which is expected to value the business at up to $3bn.

The offering of up to 20 per cent of Hertz could raise as much as $600m for Ford and will mark the end of the US car giant's ownership of all of the business.

Ford made its first investment in the company in 1987 and acquired full control three years ago. But in January Ford said it was reviewing its strategic options for Hertz, including a partial sale.

The announcement compounds a period of remarkable turbulence in the US car rental sector, which has seen a string of transactions involving four of the top players. In January Ford sold its other rental holding, Budget, to Team Rental of Florida for $350m.

Ford refused to comment yesterday on whether it would consider disposing of the remainder of Hertz at a later date. The initial public offering (IPO), which will be handled for Ford by JP Morgan, will involve the issuing of new shares of Hertz common stock and will represent just under 20 per cent of the company.

Regardless of Ford's long-term strategy, the immediate hope is for a boost to Hertz shares. Last year, Ford sold off a similar slice of its Associates First Capital Corp also in a public offering, in return for which it saw a jump in the unit's share price from $29 to over $40.

"Investor interest in the rental car industry has increased dramatically," Ford's vice-chairman, Ed Hagenlocker, said yesterday. "We believe that it is now in the best interest of our shareholders to consider an initial public offering of Hertz."

It will be some weeks before the offer will be priced. The handling of the IPO represents a victory for JP Morgan, which snatched the business from Ford's traditional Wall Street bank, Goldman Sachs.

The other recent rental transactions have included the sale of the US Avis fleet to Team Rental of Florida in a deal last year. Meanwhile, the rapidly expanding Republic Industries, led by Wayne Huizenga, has recently purchased both the Alamo and National Car Rental operations.

The shake-up in ownerships is expected to trigger a fresh attempt by the industry to raise rental prices. Renting a car remains one of the more remarkable bargains for travellers in America, surpassed only by the price of a burger on the road.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
people
News
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
News
politicsIs David Cameron trying to prove he's down with the kids?
News
Cumberbatch was speaking on US television when he made the comment (Getty)
people
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea