Hertz Global Holdings Inc. determined a proposal from Knighthead Capital Management and Certares Management to buy the car renter was superior to an existing offer from a rival investor group, according to people with knowledge of the matter who asked not to be identified discussing a private matter.
The decision further escalates the brawl to own the car renter out of bankruptcy as travel rebounds and means Hertz’s current reorganization sponsor, a group led by Centerbridge Partners, would need to counter with an updated plan of its own to stay in the running. If the company receives further proposals from either group that meet its qualifications, Hertz would hold an auction on May 10.
The Knighthead bid assigned Hertz an enterprise value of $6.2 billion, paid debt holders in full and offered shareholders cash and a chance to purchase warrants that valued their holdings at around $2.25 a share, Bloomberg previously reported.
The shares rose 24 percent Wednesday to close at $3.80 in New York.
Representatives for Knighthead and Certares declined to comment. A representative for Hertz didn’t immediately respond to a request for comment. The Wall Street Journal earlier reported that Hertz’s board deemed the Knighthead plan superior.