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In a dramatic shake-up of the equipment rental industry, Herc Holdings Inc. has struck a deal to acquire H&E Rentals for $5.3 billion, scrapping a prior agreement with United Rentals Inc. The new deal, brokered during a critical “go-shop” period, marks a 14% premium over United’s original offer.

H&E Shareholders Get a Better Offer

H&E’s shareholders will receive $78.75 in cash and 0.1287 shares of Herc stock per share in a tender offer. Herc, represented by Simpson Thacher, will then acquire all remaining shares through a second-step merger at the same price.

H&E’s original agreement with United Rentals, valued at $4.8 billion, was officially terminated upon acceptance of Herc’s superior bid, according to a statement from Milbank LLP, which advised H&E.

“This is an outstanding transaction for H&E shareholders, providing both immediate, premium value and the opportunity to participate in the substantial upside this merger creates,” said John M. Engquist, H&E’s executive chair.

United Rentals Steps Aside

Following H&E’s acceptance of the new offer, United Rentals declined to counter, opting instead to waive its right to match the proposal. The company, which had been advised by Sullivan & Cromwell LLP, formally withdrew from the bidding.

As a result, Herc paid a $63.5 million termination fee to United Rentals on behalf of H&E.

Market Reaction and Industry Impact

News of Herc’s bid sent H&E’s stock surging, closing at $100.57 per share after already doubling in value following United Rentals' initial offer.

Next Steps: Closing in 2025

The transaction, set to close by mid-2025, hinges on regulatory approvals and a majority of H&E’s shares being tendered.

Legal Counsel

• H&E Rentals is advised by Milbank LLP, with a team led by Derek Winokur, Iliana Ongun, Mike Shah, Kelly Bartley, Edward Lemanowicz, Antonio Diaz-Albertini, Brett Nadritch, Jonathon Jackson, Adam Di Vincenzo, Grant Bermann, and Dan Perry.
• Herc Holdings is represented by Simpson Thacher, with partners Joshua Bonnie, Jonathan Corsico, and Benjamin Bodurian leading the legal team.

With this bold move, Herc cements its position as a dominant force in the equipment rental industry, leaving United Rentals in the dust.