Bankrupt Hertz soars 68% after accepting a takeover bid that would give a rare payout to stock investors

• Shares of Hertz surged as much as 68% to $6.20 after the bankrupt car rental company accepted a takeover bid that would give shareholders a rare payout.
• The winning bid will pay current shareholders close to $8 a share.
• The rental car company was the target of day-traders last summer when it first announced it would file for bankruptcy.

Shares of Hertz surged as much as 68% to $6.20 after the bankrupt car rental company accepted a takeover bid that would give shareholders a rare payout.

Hertz Global Holdings announced on Wednesday that it accepted a $6 billion bid from a group of investors including Knighthead Capital management, Certares Opportunities, and Apollo Capital Management to exit Chapter 11 bankruptcy. The car rental company hopes to exit from bankruptcy at the end of June.

According to The Wall Street Journal, the winning bid will pay current shareholders close to $8 a share. In corporate bankruptcies it's unusual for shareholders to receive any payout. In March, Hertz detailed its reorganization plan which revealed that shareholders would receive no payout.

Shares of the company pared back gains and were trading around $5.84 as of Wednesday 3:10 p.m. ET.

The rental car company was the target of day-traders last summer when it first announced it would file for bankruptcy. The stock spiked as much as 825% in just a matter of weeks before paring gains.

Non-accredited and non-institutional equity equity holders will likely not qualify to participate in the rights offering of the reorganized Hertz, Bloomberg first reported.

Knighthead and Certares won with a plan that values Hertz, including debt, at around $7.4 billion, Bloomberg said. The proposal is set to fully repay debt holders, and will also hand institutional and accredited stock investors around $240 million in cash and the chance to participate in either a $1.6 billion rights offering or warrants for about 20% of the reorganized company. The proposal will need to be approved by the US Bankruptcy Court.