Herc Rentals outbids United for H&E Equipment

When United Rentals initiated an attempted takeover of H&E Equipment Services in January, it did so with a 35-day “go-shop” provision attached to its $92 per share cash offer. A new and richer offer from Florida-based Herc Rentals bumps United Rentals out of the bidding, and is likely to put H&E Equipment in Herc’s hands. 

Herc’s cash-and-stock bid is reportedly worth $3.83 billion, and on this news, shares of H&E were up 14% in premarket trading on Feb. 18. United Rentals said it does not intend to submit a revised offer.

Herc Holdings has nearly 60 years of equipment rental experience with approximately 7,700 employees and more than 450 company-operated branches in the United States and Canada. Herc reported 2023 revenues of $3.3 billion.

Reuters reported that Herc’s bid valued H&E at $104.59 per share, representing a premium of nearly 20%. United Rentals’ bid valued H&E at $92 a share, or $3.37 billion in equity value, based on a Reuters calculation. H&E added in its statement its board of directors has not yet changed its recommendation with respect to the pending transaction with United Rentals.

If H&E’s agreement with United Rentals is ended, it will have to pay the company $63.52 million in termination fees, which Herc has agreed to pay on behalf of the equipment services company.