Hertz Global Holdings, Inc. (NYSE: HTZ) agreed to offer three board seats to Carl Icahn and his affiliate firms. The activist investor and his affiliates own collectively own 8.48% stake in the company.
Details of the agreement
According to the company, it reached an agreement-in-principle to appoint Vincent J. Intrieri, Samuel Merksamer and Daniel A. Ninivaggi as new independent directors to its board.
Hertz Global Holdings, Inc. (NYSE:HTZ) said three of its existing directors will retire following the appointment of Icahn’s representatives to the board. Icahn agreed not to launch a proxy fight during the 2015 annual meeting of shareholders and to vote in favor of the nominees of the company.
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Two of the newly appointed directors will serve in the five-person search committee responsible in leading the process to find a permanent chief executive officer for Hertz Global Holdings, Inc. (NYSE:HTZ). According to the company, its board will consist of ten directors following the appointment of a permanent CEO.
Hertz Global Holdings, Inc. (NYSE:HTZ) will change its shareholder rights plan to the increase the percentage trigger to 20% under the agreement-in-principle. The company will also implement other amendments, and the agreement-in-principle remains subject to negotiation and execution of definitive documentation.
Agreement eliminates distraction
According to Linda Fayne Levinson, independent non-executive chair of Hertz Global Holdings, Inc. (NYSE:HTZ), the board of directors believe that the agreement-in-principle with Icahn and his affiliates is in the best of the company and its shareholders.
“This agreement eliminates distraction and ensures that we stay sharply focused on delivering the significant potential of the business. We will continue to take the necessary actions to fix the business. We look forward to executing on our strategic imperatives to create value for all our shareholders,” said Fayne.
Icahn believes Hertz is a great brand
On the other hand, Icahn thanked the board of Hertz Global Holdings, Inc (NYSE:HTZ) for its immediate action in agreeing to appoint his three “very capable nominees.”
“Since I believe that the most important person at a company is the CEO, I’m especially happy that two of our three nominees will be on the five-person committee to find a permanent CEO,” added Icahn.
Furthermore, the activist investor emphasized that its three nominees were recently involved in identifying and recruiting top CEOs who have been effective in a number of companies where they made investments in and where all shareholder value has been enhanced meaningfully.
Moreover, Icahn said, “I believe Hertz is a great company and a great brand and that the right new CEO will return it to its former glory. We look forward to working with the Hertz Board to create value for all shareholders.”