Hertz Says 2014 Notes Continue To Be Convertible, Rights Plan Boosts Stock

(RTTNews) - Car and equipment rental firm Hertz Global Holdings Inc. (HTZ) Tuesday said its 5.25 percent convertible senior notes Due 2014 would continue to be convertible by holders of the notes.

This conversion right has been triggered because the company's closing common stock price per share exceeded $10.77 for at least 20 trading days during the 30 consecutive trading day period ended on December 31, 2013. Based on this triggering event, the notes will be convertible until March 31.

Hertz had said on Monday that its board of directors unanimously adopted a one-year shareholder rights plan, after the firm observed unusual and substantial activity in its shares.

According to the firm, this rights plan is meant to ensure that the board remains in the best position to perform its fiduciary duties and to enable all shareholders to receive fair and equal treatment.

The plan is also designed to allow all shareholders to realize the long-term value of their investment by reducing the chances of any of them or group gaining control of Hertz through open market accumulation without appropriately compensating the shareholders or providing the board sufficient time to make informed judgments, Hertz added.

Following the rights plan, Hertz is issuing one preferred share purchase right for each current share of common stock outstanding at the close of business on January 9. Initially, these rights will not be exercisable and will trade with the shares of Hertz's common stock.

The rights will generally become exercisable only if a person or group acquires beneficial ownership of 10 percent or more of the company's common stock. In that situation, each holder of a right will be entitled to purchase, at the then-current exercise price, additional shares of common stock having a value of twice the exercise price of the right.

HTZ closed up 10.5 percent on Tuesday at $28.62.