Hertz Global Holdings Inc. reached an agreement with billionaire investor Carl Icahn to name three new directors for the board of the rental-car company in place of its current members.
The company stated yesterday that three current directors will retire to be replaced by Icahn associates, Vincent J. Intrieri, Samuel Merksamer and Daniel A. Ninivaggi. Two of the new directors will be among the five members on the board responsible for finding a new CEO.
Icahn agreed in exchange for that to not seek board representation and to vote in favor of company nominee for election at the Hertz’s 2015 annual meeting. As part of the settlement, the threshold to prompt Hertz’s shareholder-rights plan was raised from 10% to 20%., with Icahn and associates holding less than 9%.
Christopher Agnew, Connecticut-based analyst at MKM Holdings LLC said that “There’s been constructive dialogue and the board are open to ways to create shareholder value, so that’s good news. If we were headed toward a proxy battle, sometimes that creates a dark cloud over the company because of the uncertainty it creates. So the absence of that is a positive.”
The company has not disclosed financial results from the first or second quarters of 2014 and stated that it can no longer rely on its past three years of financial statements. Dissatisfaction among investors increased after Hertz withdrew on August 19 its predictions for the year.
By Gabriela Florea