Hertz's ugly IPO gets priced tonight

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.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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