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Hertz IPO Gets Closer

Private equity firms value Hertz at about $5.5 billion.
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Hertz, the private equity-backed car rental company, is valuing itself at around $5.45 billion in an updated filing for the company's planned IPO.

The company says it plans to sell 88 million shares in an initial public offering that will raise about $1.43 billion assuming a $17 a share pricing. Hertz says it sees shares pricing anywhere between $16 and $18 a share.

A consortium of private equity firms, including Carlyle and Clayton, Dubilier & Rice, bought Hertz from

Ford

(F) - Get Ford Motor Company Report

late last year in a deal valued at $15 billion, which included $9.4 billion in assumed debt. The private equity firms, along with

Merrill Lynch

(MER)

, sunk $2.3 billion of their money into the deal.

The private investors stand to received a $421.5 million "special cash dividend'' from the proceeds of the offering.

The New Jersey-based rental car company is coming public even though Hertz continues to lose money. The IPO has drawn

criticism because private investors have done little to turn around Hertz's performance and already have paid themselves a big $1 billion dividend.

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Traditionally, private equity firms have held on to companies they've acquired for several years, in order to give them time to improve performance before either re-selling them or taking them public. But with private equity firms taking in so much money, private investors have shortened the time they've been holding on to their acquisitions.

The lead underwriters on the deal include

Merrill Lynch

(MER)

,

Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. (GS) Report

and

JP Morgan Chase

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

.

Hertz will trade under the ticker "HTZ" on the New York Stock Exchange.