Deutsche Booted From Hertz IPO

An email flap cost the firm an underwriting assignment.
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A dispute over emails from a

Deutsche Bank

(DB) - Get Report

employee has cost the big investment firm a spot as one of the lead underwriters on the upcoming IPO for Hertz, the rental car company.

The New Jersey-based company, in a regulatory filing, discussed the incident but did not identify the Wall Street firm. But a Deutsche Bank spokesman confirmed that the firm is no long part of the underwriting team for the $1.43 billion initial public offering.

"After reviewing the emails in question, we determined it would be best for our client if we took an extremely cautious approach, so we resigned our role in the offering,'' a Deutsche Bank spokesman says.

The investment firm would not comment on the nature of the emails. But Hertz says the emails, discussing the upcoming IPO, were sent "to approximately 175 institutional accounts.''

Hertz, in the filing, says it doesn't believe the emails violated any securities laws. But the rental-car company says the messages could be construed as an offering statement not contained within the official prospectus.

Wall Street has kept a close eye on the Hertz IPO because it's coming less than a year after a consortium of private equity firms, including

Merrill Lynch

(MER)

, bought the rental company from

Ford

(F) - Get Report

, in a deal valued at $15 billion. The IPO has raised eyebrows because the private equity investors, who sunk $2.3 billion of their own money in the deal, already have paid themselves a $1 billion dividend.

A good chunk of the proceeds from the IPO will go toward paying down a $1 billion loan Hertz took out to finance the special dividend. Deutsche Bank was part of the syndicate that arranged the loan.

The other lead underwriters on the deal include Merrill Lynch,

Goldman Sachs

(GS) - Get Report

and

JP Morgan Chase

(JPM) - Get Report

. The stock will trade on the

New York Stock Exchange

under the ticker symbol "HTZ."