Summary
United Rentals, Inc. (URI) has announced a definitive agreement to be acquired by affiliates of Cerberus Capital Management, L.P. The transaction, structured as a merger, will see United Rentals become a privately held company with shareholders receiving $34.50 in cash per common share. This significant cash payout represents a premium over the prevailing market price and will also be applied to preferred stock and equity awards. The Merger Agreement includes a "go-shop" period until August 31, 2007, allowing United Rentals to solicit competing acquisition proposals. The company can terminate the agreement under specific conditions related to superior proposals, with a termination fee structure in place that incentivizes the company to explore alternatives while also providing protection to the buyer. The transaction is subject to customary closing conditions, including stockholder approval and regulatory clearance.
Key Highlights
- 1United Rentals to be acquired by RAM Holdings, Inc. (an affiliate of Cerberus Capital Management) in a cash merger transaction.
- 2Each outstanding common share will be converted into $34.50 in cash, less any required withholding taxes.
- 3Preferred stockholders and holders of equity awards will also receive cash consideration based on the terms of the merger agreement.
- 4The Merger Agreement includes a "go-shop" provision, allowing United Rentals to seek alternative acquisition proposals until August 31, 2007.
- 5A termination fee of $100,000,000 is payable to Parent under certain circumstances, with a reduced fee of $40,000,000 if terminated for a superior proposal during the go-shop period.
- 6Key stockholders and the Chairman of the Board have entered into voting agreements to support the merger.
- 7The transaction is subject to customary closing conditions, including stockholder approval and regulatory approvals, and is not contingent on financing.