Ford to buy back the rest of Hertz

Journal Record, The (Oklahoma City), Sep 22, 2000

DETROIT (AP) -- Ford will spend $597 million to buy the remaining publicly-held 18.5 percent of rental car company Hertz.

Ford, which already owns the rest of Hertz, said it would offer Hertz shareholders $30 a share for their stock. On Thursday, shares of Hertz were up $7.38, or more than 30 percent, to close at $31.63 on the New York Stock Exchange.

The automaker had spun off the Hertz shares in 1997, when interest in rental car companies was growing among investors. The stock hit a high of just over $60 a share in May 1999 but has fallen since and is now trading below its initial public offering price.

The move is the latest in a series by Ford aimed at rewarding shareholders. The company earlier gave its own stockholders $5.7 billion through a complicated stock swap deal and announced a $5 billion stock buyback last week.

The deal, which is technically considered a merger, must be approved by Hertz's board of directors.

Ford is the only one of the Big Three that still has an interest in a rental-car firm; General Motors and the Chrysler arm of DaimlerChrysler sold their stakes a few years ago.

Hertz, with a fleet of 371,000 vehicles, is a big customer for Ford, buying $2.8 billion in Ford vehicles in the first half of this year.