Hertz Stock Soars 22% After-Hours on New Financing Deal
Car rental giant announces a $250 million notes offering and a side deal boosting long exposure for Bill Ackman's Pershing Square.
Shares of Hertz Global Holdings (HTZ) surged more than 22% in after-hours trading Wednesday following the announcement of a multifaceted financing arrangement that significantly increases the economic interest of Bill Ackman's Pershing Square Capital Management.
The car rental company unveiled plans for a due in 2030. Hertz stated it intends to use the proceeds to refinance a portion of its existing senior notes due in 2026, a move aimed at strengthening its balance sheet and extending its debt maturities.
In a concurrent transaction that caught investors' attention, an affiliate of Pershing Square entered into a series of privately negotiated total return swaps. These derivative contracts will provide the hedge fund with approximately to Hertz's common stock, signaling a renewed vote of confidence from the prominent activist investor.
The market's reaction was swift and decisive, with the stock price climbing sharply on elevated volume as investors cheered the move. This isn't the first time Ackman's involvement has fueled a rally in the stock; Pershing Square's disclosure of a has been a key driver behind the stock's nearly 90% appreciation year-to-date.
The dual-pronged announcement—combining strategic debt management with a bolstered commitment from a major institutional backer—suggests a concerted effort by Hertz to solidify its financial foundation and continue its recovery. For investors, Pershing Square's decision to double down on its bet is being interpreted as a strong endorsement of the company's management and future prospects in the evolving transportation landscape.