An activist investor may give Hertz Global Holdings Inc. (HTZ) the final push it needs to split off its equipment-leasing division and focus on renting cars.
Hertz surged to a record after adopting a poison pill amid “unusual and substantial” trading, which the company suspected marked the entrance of activists, according to people familiar with the matter. Northcoast Research Holdings LLC said the investors might want to speed up a spinoff or sale of the equipment-rental business, a separation that analysts have suggested since Hertz went public in 2006. Shareholder Roosevelt Investment Group Inc. said there isn’t a strategic benefit to keeping the unit tied to Hertz’s main car-rental business.
The $12 billion company may have attracted an activist after its returns last year lagged behind those of rival Avis Budget Group Inc. (CAR), which doesn’t lease equipment, said Millman Research Associates. It’s an opportune time to finally separate rental equipment because an improving economy has boosted demand for the unit’s products and could give it a higher stand-alone value, according to MKM Partners LLC.