Billionaire Barry Rosenstein, whose JANA Partners hedge fund controls more than 8% of rental car company Hertz, said the company is likely to begin a share repurchase program in the near future..
Speaking on Thursday at the EnTrust Investment Summit in New York. Rosenstein said that he expects Hertz to report financials by early summer that would give the firm the leeway it needs to begin the repurchase program, and that the company could eventually repurchase up to 20% of outstanding shares, Bloomberg sources said.
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Florida-based Hertz has been under pressure from activist shareholder Hedge Funds such as Rosenstein, Daniel Loeb and Carl Icahn, who argue that management could do much more to improve shareholder value.
More than 53% of the company is currently controlled by hedge fund firms.
As for an accounting scandal reported last summer, Hertz has not yet reported financial results for 2014 and has told investors, there could be irregularities with its financial statements as far back as 2011.
Hertz’s share price is down 14% so far in 2015.
The Bloomberg source also quoted Rosenstein as saying that after the share repurchase program is in full swing, Hertz could easily double its earnings per share over the next couple of years and the stock could triple.
Following the release of the Bloomberg report, shares of Hertz Global closed up 4.44% to $22.56 on Thursday.