Management group bids $4.2B for Hertz

Hertz received a bid from Knighthead Capital Management and Certares Management to purchase the rental-car company out of bankruptcy for as much as $4.2 billion, according to court documents.

Under the plan, Knighthead and Certares would take control of Hertz Global Holdings Inc. when it emerges from its Chapter 11 reorganization, with the final value of the deal dependent on how much existing lenders participate in the financing. The bid is backed by a travel industry-focused investment fund that Knighthead and Certares created last year to take advantage of an expected rebound in companies that were disrupted by the COVID-19 pandemic.

Hertz was unable to weather the blows from the pandemic that peers Enterprise Holdings Inc. and Avis Budget Group Inc. also felt after decades of mismanagement — a plight that one former top executive summed up as a slow-moving train wreck.

A hearing to approve the terms of the plan is scheduled for April 16.

Hertz filed for bankruptcy in May when the near-total shutdown of the global travel industry sent its rental revenue plunging

The company reported revenue for the fourth quarter of $1.2 billion, down 48 percent from the previous year’s $2.33 billion.