A group of investment firms including Centerbridge Partners is preparing a new offer to buy Hertz Global Holdings Inc. out of bankruptcy, setting up a final showdown over the company in an auction next week.
The group, led by Centerbridge, Warburg Pincus and Dundon Capital Partners, plans to sweeten a previous offer that was surpassed by a plan from Knighthead Capital Management and Certares Management, according to people with knowledge of the matter who asked not to be named because the bid isn’t yet public. Terms of the new bid couldn’t immediately be learned, but any exit plan would be subject to bankruptcy court and board approval.
The Knighthead and Certares plan assigned Hertz an enterprise value of around $6.2 billion and offered shareholders a mix of cash and warrants worth around $2.25 a share, Bloomberg previously reported.
Hertz will review final proposals from both groups to determine if they meet its qualifications, and pick a winner in an auction currently scheduled for Monday. The Centerbridge group has until the end of Friday to submit a formal counteroffer, which kicks off the court-supervised auction process.
A representative for Centerbridge didn’t immediately comment, while a spokeswoman for Warburg Pincus declined to comment. Representatives for Dundon Capital Partners and Hertz didn’t immediately respond to requests for comment.
The firms have been dueling with Knighthead and Certares over ownership of Hertz, with both investor groups submitting multiple rounds of proposals to buy the company. The brawl comes amid surging demand for car rentals and summer travel that has let many firms raise prices while still leaving them without enough cars for customers to drive off the lot.
The latest plans from both groups offer lenders and bondholders full repayment and a partial recovery for shareholders, a relative rarity in bankruptcy proceedings.
Hertz initially chose an iteration of the Centerbridge group’s plan, and U.S. Bankruptcy Judge Mary Walrath last month approved a so-called breakup fee for those funds if they were later outbid. Hertz has been rushing to exit bankruptcy by summer to take advantage of a hot stock market and participate in the travel boom. Rival Avis Budget Group Inc. has seen its shares more than double this year.
The case is Hertz Corp. 20-11218, U.S. Bankruptcy Court, District of Delaware (Wilmington).