The bidding tender for the bankrupt Hertz has reached the court auction


A bidding war for the bankrupt car rental group Hertz His last game will be reached when rival private equity bidders close their scores in an auction conducted in federal bankruptcy court on Monday.

A consortium led by Centerbridge Partners indicated it would counter-complain against a recent proposal made by another group led by Knighthead Capital that set Hertz’s enterprise value at $ 6.2bn.

This figure will allow existing Hertz shareholders to make a surprisingly generous recovery worth more than $ 2 per share. Comes as a battle for car rental companies Travel And leisure industries are recovering as vaccination rates rise faster and the U.S. economy is booming.

In March, Hertz received a bid from Knighthead and its partners, Sartre’s Opportunities, when the company began punching transactions between the two bidding groups for just 4.8 billion. That bid was then topped by the Centerbridge Group in April, which includes Warburg Pincus and Dondon Capital Partners.

On Wednesday, the Hertz board determined that the proposal received from Knighthead formed a “higher proposal” last week. The bidding procedures established by the bankruptcy court in Delaware allowed Centerbridge to trigger Monday’s auction.

The initial bids of the two groups considered the junior bondholders who received equity in the new company and the existing shareholders would be removed.

A group of hedge funds with Hertz shares frozen argued that the company’s valuation was large enough to support at least a moderate recovery for existing shareholders. The group has teamed up with Knighthead / Serteres at Apollo Global Management to lead a package of new debt and equity capital in 7bn to restructure Hertz.

Their offer provides existing Hertz equity holders with a 50 cents of cash recovery and allows them to purchase new Hertz equity, either through a rights offer or through a warrant. According to a source familiar with the matter, the group has set the price of the package at around ২ 2.25 per share.

Hertz shares rallied more than five dollars last summer to power retailers using the Robinhood app. Experts, however, ridiculed it, saying that junior credit payers would take less than 100 cents above the dollar in the restructuring, so even lower-level shareholders would have no right to receive anything.

The Knighthead plan raises enough cash to pay off all creditors in full, as well as pay shareholders in cash. Shares of Hertz rose to 48 48,344 from a low of 66 cents this year, exceeding the current market capitalization by 500m.

The bankruptcy court must approve the winning bidder, which will follow a vote on the Hertz claimants’ plan. The company is racing to lock in the deal and get out of the Chapter 11 process early in July, the start of the company’s busiest season.

Favorable conditions in the capital markets have enabled Hartz to fight.

“I can’t remember a better financing market than this,” said William Derro, Hertz’s investment banker at Moilis & Co, in testimony in court in April.



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