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Investing.com-- H&E Equipment Services Inc (NASDAQ:HEES) accepted a $5.3 billion bid from Herc Rentals over an earlier offer from rival United Rentals (NYSE:URI), the Financial Times reported on Tuesday.
Herc’s offer is in cash and stock, and values H&E at nearly $5.3 billion- about $500 million more than United’s all-cash offer, which H&E’s board approved last month, the FT report said, citing people briefed on the matter.
The Herc deal values H&E at about $105 per share- a roughly 20% premium to the latter’s Monday close. This was higher than United’s initial offer of $92 per share.
United has until the end of the week to submit a competing bid, the FT report said.
The deal comes as H&E was allowed a “go-shop” period under its agreement with United, where it could field rival takeover bids for a month.
Herc appears to have gatecrashed United’s bid, with a merger between Herc and H&E standing to create a much larger competitor for United in the heavy equipment rental industry.
The sector has seen a string of consolidations and mergers in recent years, as it grapples with sluggish industrial demand in North America and competition from Chinese players.