Posted by: Aaron Pressman on November 15, 2006
As I’ve noted time and time again, the upcoming IPO for car rental giant Hertz seems to be trying to set some kind of high water mark for private equity at the trough. It’s set to be priced tonight with 88 million shares selling for between $16 and $18. But it’s an open question whether the underwriters will find enough demand to stay within that range given that almost all of the proceeds will be paying back debt that paid for dividends to LBO owners Clayton Dubilier & Rice, the Carlyle Group and Merrill Lynch. In a Bloomberg story today, a few analysts and investors warn an appropriate price would be closer to $14.
I’ll be back with an update after the deal is priced.
Update: Well, no surprise — Hertz priced below its expected range at $15 a share, raising $1.32 billion. I guess special dividend number 2 will have to be reduced.