Ford agrees to sell Hertz for $5.6 billion - Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars
Ford Forum Ford Forum

» Auto Insurance
» Featured Product
ยป Wheel & Tire Center

Go Back   Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars > Fordforums Community > USENET NewsGroups > alt.autos.ford
Register Home Forum Active Topics Photo Gallery Auto Loans Garage Mark Forums Read Auto Escrow

FordForums.com is the premier Ford Forum on the internet. Registered Users do not see the above ads.
Reply
 
LinkBack Thread Tools Display Modes
Old 09-14-2005, 06:01   #1 (permalink)
Grover C. McCoury III
Guest
 
Posts: n/a
Ford agrees to sell Hertz for $5.6 billion

Sept. 12, 2005
(AP) DETROIT - Ford Motor Co., aiming to focus more on building cars and
trucks, said Monday it will sell its Hertz Corp. rental car business for
$5.6 billion in cash.

Dearborn-based Ford, the nation's second-biggest automaker, said it will
sell all shares of common stock in Hertz, its wholly owned subsidiary, to a
private equity group composed of Clayton Dubilier & Rice, The Carlyle Group
and Merrill Lynch Global Private Equity in a deal valued at about $15
billion, including debt.

Ford announced in April it was considering shedding Hertz, which it has
owned since 1994, to concentrate on its core automotive business. The
infusion of cash should help the automaker, which has been struggling with
falling sport utility vehicle sales, growing U.S. health care costs and
other issues. Ford's second-quarter profit fell 19 percent to $946 million.

"This transaction reinforces our commitment to strengthening our balance
sheet and investing in our core automotive business," said Don Leclair, Ford's
chief financial officer.

The deal is subject to regulatory approvals and is expected to be completed
by year's end.

Hertz plans a cash tender offer for up to $2.3 billion of outstanding debt
securities in connection with the transaction; certain other Hertz debt will
be refinanced.

In addition, Ford Motor Credit Co., the automaker's finance arm, said
separately it intends to file a registration statement to exchange its own
debt securities for up to $2.4 billion of outstanding Hertz debt with
similar terms. Such an exchange could generate cash for Ford Motor Credit.

The transaction also involves another $4.7 billion in primarily other Hertz
debt, a Ford spokeswoman said.

Burnham Securities analyst David Healy called the deal "a reasonable move"
for Ford, which he said can certainly use the extra cash to enhance new
product development and offset rising health care expenses.

"Hertz has become less and less important as an outlet for Ford cars as Ford
has pared back sales to Hertz and other daily rental companies," Healy said.
"It's really a noncore business right now."

Still, Hertz is the world's largest general-use car rental business. It has
been a solid contributor to Ford's bottom line, with revenue of $6.7 billion
and net income of $365.5 million in 2004.

The company, founded in 1918, rents vehicles from 7,400 locations in more
than 150 countries, according to a recent filing with the Securities and
Exchange Commission. In addition, Hertz is a major supplier of rental
equipment such as tractors, dump trucks and power washers. Hertz rents
equipment from 340 locations in North America, France and Spain.

Hertz controlled 30 percent of the market at the 180 largest U.S. airports
in 2004. The company has been trying to expand its off-airport rental
business by opening neighborhood locations.

The ties with Ford may not be completely severed. In July, Hertz agreed to
continue buying and promoting Ford vehicles through August 2010, in exchange
for Ford paying half its advertising costs each year. It wasn't clear
whether that agreement would be kept in place.

Approximately 41 percent of the vehicles Hertz acquired domestically in 2004
were made by Ford and its subsidiaries, according to a recent SEC filing.

Some experts on private equity investors have said buyout firms often
acquire companies because they think they can make them bigger players in
the market. But because Hertz already is the world's largest general-use car
rental agency, the firms involved in this case could try to streamline Hertz's
management and then take the company public.

Hertz, they say, is an appealing company for investors because it has a
relatively stable cash flow.

Two groups of firms had been competing for Hertz. The other was made up of
Bain Capital, The Blackstone Group, Texas Pacific Group and Thomas H. Lee
Partners.

Yet another $.02 worth from a proud owner of a 1970 Mach 1 351C @
http://community.webshots.com/album/18644819fHAehGJAjt


  Reply With Quote
Sponsored Links
Advertisement
 
Old 09-14-2005, 07:01   #2 (permalink)
Backyard Mechanic
Guest
 
Posts: n/a
Re: Ford agrees to sell Hertz for $5.6 billion

More freakin accounting/PR tricks.

One has to wonder EXACTLY HOW MUCH a profitable subsidiary "distracts"
Ford from running it's core business!
Compared, say, to Ford Credit!

Come the reawakening, line 'em up for execution by bullet:

1. Tort Lawyers (no brainer)
2. MBA's
3. PR spinners.


"Grover C. McCoury III" <gcmccoury@yahoo.com> wrote in
news:Vb-dnW9XBNorgLXeRVn-qQ@adelphia.com:

> Sept. 12, 2005
> (AP) DETROIT - Ford Motor Co., aiming to focus more on building cars
> and trucks, said Monday it will sell its Hertz Corp. rental car
> business for $5.6 billion in cash.
>
> Dearborn-based Ford, the nation's second-biggest automaker, said it
> will sell all shares of common stock in Hertz, its wholly owned
> subsidiary, to a private equity group composed of Clayton Dubilier &
> Rice, The Carlyle Group and Merrill Lynch Global Private Equity in a
> deal valued at about $15 billion, including debt.
>
> Ford announced in April it was considering shedding Hertz, which it
> has owned since 1994, to concentrate on its core automotive business.
> The infusion of cash should help the automaker, which has been
> struggling with falling sport utility vehicle sales, growing U.S.
> health care costs and other issues. Ford's second-quarter profit fell
> 19 percent to $946 million.
>
> "This transaction reinforces our commitment to strengthening our
> balance sheet and investing in our core automotive business," said Don
> Leclair, Ford's chief financial officer.
>
> The deal is subject to regulatory approvals and is expected to be
> completed by year's end.
>
> Hertz plans a cash tender offer for up to $2.3 billion of outstanding
> debt securities in connection with the transaction; certain other
> Hertz debt will be refinanced.
>
> In addition, Ford Motor Credit Co., the automaker's finance arm, said
> separately it intends to file a registration statement to exchange its
> own debt securities for up to $2.4 billion of outstanding Hertz debt
> with similar terms. Such an exchange could generate cash for Ford
> Motor Credit.
>
> The transaction also involves another $4.7 billion in primarily other
> Hertz debt, a Ford spokeswoman said.
>
> Burnham Securities analyst David Healy called the deal "a reasonable
> move" for Ford, which he said can certainly use the extra cash to
> enhance new product development and offset rising health care
> expenses.
>
> "Hertz has become less and less important as an outlet for Ford cars
> as Ford has pared back sales to Hertz and other daily rental
> companies," Healy said. "It's really a noncore business right now."
>
> Still, Hertz is the world's largest general-use car rental business.
> It has been a solid contributor to Ford's bottom line, with revenue of
> $6.7 billion and net income of $365.5 million in 2004.
>
> The company, founded in 1918, rents vehicles from 7,400 locations in
> more than 150 countries, according to a recent filing with the
> Securities and Exchange Commission. In addition, Hertz is a major
> supplier of rental equipment such as tractors, dump trucks and power
> washers. Hertz rents equipment from 340 locations in North America,
> France and Spain.
>
> Hertz controlled 30 percent of the market at the 180 largest U.S.
> airports in 2004. The company has been trying to expand its
> off-airport rental business by opening neighborhood locations.
>
> The ties with Ford may not be completely severed. In July, Hertz
> agreed to continue buying and promoting Ford vehicles through August
> 2010, in exchange for Ford paying half its advertising costs each
> year. It wasn't clear whether that agreement would be kept in place.
>
> Approximately 41 percent of the vehicles Hertz acquired domestically
> in 2004 were made by Ford and its subsidiaries, according to a recent
> SEC filing.
>
> Some experts on private equity investors have said buyout firms often
> acquire companies because they think they can make them bigger players
> in the market. But because Hertz already is the world's largest
> general-use car rental agency, the firms involved in this case could
> try to streamline Hertz's management and then take the company public.
>
> Hertz, they say, is an appealing company for investors because it has
> a relatively stable cash flow.
>
> Two groups of firms had been competing for Hertz. The other was made
> up of Bain Capital, The Blackstone Group, Texas Pacific Group and
> Thomas H. Lee Partners.
>
> Yet another $.02 worth from a proud owner of a 1970 Mach 1 351C @
> http://community.webshots.com/album/18644819fHAehGJAjt
>
>
>


  Reply With Quote
Old 09-14-2005, 08:01   #3 (permalink)
Mike Hunter
Guest
 
Posts: n/a
Re: Ford agrees to sell Hertz for $5.6 billion

According to Fords stockholder report, the sale is to obtain an infusion of
cash to be used to develop new products in the manufacturing division

mike

"Backyard Mechanic" <pettyfog@yaywho.com> wrote in message
news:Xns96D163C4BFFB9pettyfogery@207.115.63.158...
> More freakin accounting/PR tricks.
>
> One has to wonder EXACTLY HOW MUCH a profitable subsidiary "distracts"
> Ford from running it's core business!
> Compared, say, to Ford Credit!
>
> Come the reawakening, line 'em up for execution by bullet:
>
> 1. Tort Lawyers (no brainer)
> 2. MBA's
> 3. PR spinners.
>
>
> "Grover C. McCoury III" <gcmccoury@yahoo.com> wrote in
> news:Vb-dnW9XBNorgLXeRVn-qQ@adelphia.com:
>
>> Sept. 12, 2005
>> (AP) DETROIT - Ford Motor Co., aiming to focus more on building cars
>> and trucks, said Monday it will sell its Hertz Corp. rental car
>> business for $5.6 billion in cash.
>>
>> Dearborn-based Ford, the nation's second-biggest automaker, said it
>> will sell all shares of common stock in Hertz, its wholly owned
>> subsidiary, to a private equity group composed of Clayton Dubilier &
>> Rice, The Carlyle Group and Merrill Lynch Global Private Equity in a
>> deal valued at about $15 billion, including debt.
>>
>> Ford announced in April it was considering shedding Hertz, which it
>> has owned since 1994, to concentrate on its core automotive business.
>> The infusion of cash should help the automaker, which has been
>> struggling with falling sport utility vehicle sales, growing U.S.
>> health care costs and other issues. Ford's second-quarter profit fell
>> 19 percent to $946 million.
>>
>> "This transaction reinforces our commitment to strengthening our
>> balance sheet and investing in our core automotive business," said Don
>> Leclair, Ford's chief financial officer.
>>
>> The deal is subject to regulatory approvals and is expected to be
>> completed by year's end.
>>
>> Hertz plans a cash tender offer for up to $2.3 billion of outstanding
>> debt securities in connection with the transaction; certain other
>> Hertz debt will be refinanced.
>>
>> In addition, Ford Motor Credit Co., the automaker's finance arm, said
>> separately it intends to file a registration statement to exchange its
>> own debt securities for up to $2.4 billion of outstanding Hertz debt
>> with similar terms. Such an exchange could generate cash for Ford
>> Motor Credit.
>>
>> The transaction also involves another $4.7 billion in primarily other
>> Hertz debt, a Ford spokeswoman said.
>>
>> Burnham Securities analyst David Healy called the deal "a reasonable
>> move" for Ford, which he said can certainly use the extra cash to
>> enhance new product development and offset rising health care
>> expenses.
>>
>> "Hertz has become less and less important as an outlet for Ford cars
>> as Ford has pared back sales to Hertz and other daily rental
>> companies," Healy said. "It's really a noncore business right now."
>>
>> Still, Hertz is the world's largest general-use car rental business.
>> It has been a solid contributor to Ford's bottom line, with revenue of
>> $6.7 billion and net income of $365.5 million in 2004.
>>
>> The company, founded in 1918, rents vehicles from 7,400 locations in
>> more than 150 countries, according to a recent filing with the
>> Securities and Exchange Commission. In addition, Hertz is a major
>> supplier of rental equipment such as tractors, dump trucks and power
>> washers. Hertz rents equipment from 340 locations in North America,
>> France and Spain.
>>
>> Hertz controlled 30 percent of the market at the 180 largest U.S.
>> airports in 2004. The company has been trying to expand its
>> off-airport rental business by opening neighborhood locations.
>>
>> The ties with Ford may not be completely severed. In July, Hertz
>> agreed to continue buying and promoting Ford vehicles through August
>> 2010, in exchange for Ford paying half its advertising costs each
>> year. It wasn't clear whether that agreement would be kept in place.
>>
>> Approximately 41 percent of the vehicles Hertz acquired domestically
>> in 2004 were made by Ford and its subsidiaries, according to a recent
>> SEC filing.
>>
>> Some experts on private equity investors have said buyout firms often
>> acquire companies because they think they can make them bigger players
>> in the market. But because Hertz already is the world's largest
>> general-use car rental agency, the firms involved in this case could
>> try to streamline Hertz's management and then take the company public.
>>
>> Hertz, they say, is an appealing company for investors because it has
>> a relatively stable cash flow.
>>
>> Two groups of firms had been competing for Hertz. The other was made
>> up of Bain Capital, The Blackstone Group, Texas Pacific Group and
>> Thomas H. Lee Partners.
>>
>> Yet another $.02 worth from a proud owner of a 1970 Mach 1 351C @
>> http://community.webshots.com/album/18644819fHAehGJAjt
>>
>>
>>

>



  Reply With Quote
Old 09-14-2005, 10:01   #4 (permalink)
Backyard Mechanic
Guest
 
Posts: n/a
Re: Ford agrees to sell Hertz for $5.6 billion

"Mike Hunter" <mikehunt22@mailcity.com> wrote in
news:u9ucnUAuTvlapbXeUSdV9g@ptd.net:

> According to Fords stockholder report, the sale is to obtain an
> infusion of cash to be used to develop new products in the
> manufacturing division
>
> mike



Of COURSE it is.. that's what the real reason always is... guess I should
have made that clear.

They had to choose between the associated profitable effort and the fact
they're losing money hand over fist in the core group.

But it's like rolling the dice.. they HAVE to stop the bleeding and there's
no SURE indication that new product lines will do that
  Reply With Quote
Old 09-14-2005, 13:01   #5 (permalink)
Mike Hunter
Guest
 
Posts: n/a
Re: Ford agrees to sell Hertz for $5.6 billion

Ford lost money in only one quarter. They have not lost money for the year.
As to product, Fords newest models the 500 and Mustang are selling better
than Fords initial expectations. Fords demise was predicted several years
ago and they are still number two with sales far greater than Chrysler,
Toyota or Honda

mike

"Backyard Mechanic" <pettyfog@yaywho.com> wrote in message
news:Xns96D17D56DE9CBpettyfogery@207.115.63.158...
> "Mike Hunter" <mikehunt22@mailcity.com> wrote in
> news:u9ucnUAuTvlapbXeUSdV9g@ptd.net:
>
>> According to Fords stockholder report, the sale is to obtain an
>> infusion of cash to be used to develop new products in the
>> manufacturing division
>>
>> mike

>
>
> Of COURSE it is.. that's what the real reason always is... guess I should
> have made that clear.
>
> They had to choose between the associated profitable effort and the fact
> they're losing money hand over fist in the core group.
>
> But it's like rolling the dice.. they HAVE to stop the bleeding and
> there's
> no SURE indication that new product lines will do that



  Reply With Quote
Old 10-09-2005, 18:01   #6 (permalink)
Jeff
Guest
 
Posts: n/a
Re: Ford agrees to sell Hertz for $5.6 billion


"Mike Hunter" <mikehunt22@mailcity.com> wrote in message
news:uP-cnWWDTLrL7rXeUSdV9g@ptd.net...
> Ford lost money in only one quarter. They have not lost money for the
> year. As to product, Fords newest models the 500 and Mustang are selling
> better than Fords initial expectations. Fords demise was predicted
> several years ago and they are still number two with sales far greater
> than Chrysler, Toyota or Honda
>
> mike


True, worldwide
(http://auto.indiamart.com/cars/car-s...atistics.html0.

However, Ford and GM face many challanges, including high cost due to
retired workers (from pensions and health care). Plus, Ford and GM don't
make much money (if any) off of car sales in the US. They make their money
off of truck (including SUV) sales, which are down with the high gas prices
that have been around for the last few months. And Ford and GM are facing
stiff competition from foreign makers, particularly Toyota with its pickup.
And both automakers have been using rebates to increase sales, which is
quite costly.

Jeff


  Reply With Quote
Sponsored Links
Advertisement
 
Reply

  Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars > Fordforums Community > USENET NewsGroups > alt.autos.ford



Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are Off
[IMG] code is Off
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Powered by vBadvanced CMPS v3.2.2

All times are GMT -7. The time now is 02:38.



Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.6.0
Garage Plus vBulletin Plugins by Drive Thru Online, Inc.