Hertz adopts shareholder rights plan

Hertz rental cars are seen in a rental lot near Detroit Metropolitan airport in Romulus, Michigan, May 9, 2011. [Photo/Agencies]

Hertz Global Holdings Inc, the No 2 US car rental company, said it adopted a shareholder rights plan as it had observed "unusual and substantial activity" in its shares.

Hertz said the plan will come into effect if a person or group acquires 10 percent or more of the company's stock.

The company said the plan was not adopted in response to any specific bid to take over control of the company.

Shares of Hertz rose 3 percent in extended trading after closing at $25.91 on the New York Stock Exchange on Monday.

Although Hertz's shares have risen 58 percent this year, they have failed to match the performance of smaller rival Avis Budget Group Inc's shares, which have nearly doubled during the same period.

Park Ridge, New Jersey-based Hertz fought a long, hard battle with Avis to buy Dollar Thrifty, which serves the leisure market and has lower-priced rental options compared with Hertz, which primarily serves corporate customers.

The $2.6 billion acquisition helped Hertz consolidate its position as No 2 in the US car rental market behind privately held Enterprise Holdings.

BofA Merrill Lynch and Barclays are acting as financial advisers to Hertz.