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Ford Likely To Get $10 Billion for Hertz

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From TCC

Two groups of private equity firms have emerged in what should be a about a $10 billion bidding battle for Ford's Hertz rental car unit, which it is selling to raise capital. One bidder includes Bain Capital Partners LLC, Blackstone Group LP, Texas Pacific Group and Thomas H. Lee Partners LP, according to published reports and confirmed by executives familiar with the process. The second group includes Carlyle Group, Clayton, Dubilier & Rice Inc. and Merrill Lynch Global Private Equity.

If the bids don't measure up to Ford's expectations, the rental car company could pursue an initial public offering instead. In June, Hertz filed a preliminary document with the Securities and Exchange Commission for an IPO. If that came to pass, Ford would retain an interest at first, but then divest its remaining ownership interest in Hertz. Like most car rental companies, Hertz is highly leveraged. The car-rental company has about $6 billion of unsecured, medium-term and long-term debt, and about $1 billion of secured debt. It also gets to buy vehicles from Ford at favorable rates. -Jim Burt

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