May 10 (Reuters) - Hertz Global Holdings Inc , which has made a renewed bid for smaller rival Dollar Thrifty Automotive Group , may consider spinning off its equipment rental unit to focus on its car rental business, a top executive said.
The equipment business, which rents out excavators, electrical tools and air compressors among other industrial products, accounts for 15 percent of the company’s revenue and has been undergoing restructuring to cut costs.
Hertz said as the effect of the restructuring starts to show in the unit’s operating results in the next 12-24 months, the company may consider spinning it off or explore other options.
“We would only do that if we generate positive shareholder value and get a fair valuation for the business,” Chief Executive Mark Frissora said at a Wells Fargo Securities Industrial and Construction Conference.
“That is a possibility and it is something we might look at in the future.”
Hurt by the economic downturn, Hertz closed about 22 branches in its U.S. equipment rental business in 2008. It also restructured its car hire business, closing 250 off-airport car rentals.
In its most-recent quarter, equipment rental revenues rose 13 percent to $268.2 million.
The CEO’s comments come a day after Hertz raised its bid for Dollar Thrifty by about 30 percent to $2.1 billion -- the latest move in its 13-month-long battle with Avis Budget Group Inc to buy the smaller car rental company. [ID:nL3E7G91KA]
Hertz shares were trading down 1 percent at $16.50 on Tuesday on the New York Stock Exchange, while shares of Dollar Thrifty were up 3 percent at $81.66. (Reporting by Megha Mandavia and A. Ananthalakshmi in Bangalore; Editing by Saumyadeb Chakrabarty) (email@example.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging; firstname.lastname@example.org))