Icahn Reveals Stake in Hertz, Plans to Push Management

Wednesday, 20 Aug 2014 05:20 PM

 

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Billionaire investor Carl Icahn said on Wednesday that he owns an 8.5 percent stake in Hertz Global Holdings Inc. and plans to pressure the rental car company's management over accounting issues and operational failures.

Icahn, one of the world's most outspoken activist investors, spent $470.5 million for the 38.8 million shares he owns, according to a regulatory filing.

He said he may seek a board seat, something he has done at many other companies. Last year Hertz adopted a so-called poison pill to prevent any one shareholder from gaining control of the company as activist investors began circling.

The company's stock sank as much as 13 percent in early trading Wednesday before rebounding in the last hour to end down 3.9 percent at $30.33. The selling followed Tuesday's late news that Hertz withdrew its full-year financial forecast, blaming a shortage of cars due to motor industry recalls and an accounting error.

In aftermarket trading Wednesday, Hertz shares were up 0.6 percent at $30.50.

Hertz announced in March that it would spin off its equipment rental unit and earlier in the year speculation mounted that Icahn had built up a stake in the company.

But it was not among the roughly two dozen U.S. stocks that Icahn said he owned at the end of the second quarter when he released his quarterly filings last week.

At 78, when most people are living off their life's investments, Icahn is still casting around to make new bets and is busier than ever in shining the spotlight on management teams he feels are underperforming.

On Monday he told Reuters that Family Dollar Stores Inc., a company he owns stock in, has wasted hundreds of millions of dollars by trying to avoid being bought by rival Dollar General, as Icahn has suggested.

His second-quarter filing showed that he made a new bet on Gannett Co. and liquidated his position in Forest Laboratories Inc., which was acquired by Actavis.

Icahn is not the only investor expressing concern about Hertz management. A spokesman for Fir Tree Partners, which owns a 3 percent stake, said "the CEO has had some serious missteps."

© 2014 Thomson/Reuters. All rights reserved.

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