United Rentals takes private equity firm to court

News Story
- 22 Nov 2007 ( #337 ) - GREENWICH, CT, United States
2 min read
United Rentals Inc has filed a lawsuit after the collapse of a planned merger with Cerberus Capital Management LP.

Forkliftaction.com News reported in July United Rentals signed an agreement to be acquired by Cerberus Capital Management LLC for USD6.6 billion (Forkliftaction.com News #320).

According to United Rentals, prior to receiving a letter from RAM Holdings Inc and RAM Acquisition Corp (collectively "RAM") announcing their intention to repudiate, Stephen A Feinburg, Cerberus CEO, had met with United Rentals representatives. Feinburg, United Rentals says, informed the rental company's advisors that RAM did not want to "force" its financing sources to fulfil their commitments. United Rentals alleges that Cerberus also acknowledged that there had been no material adverse change in United Rentals' business.

Hence, United Rentals is asking the Delaware Court of Chancery to compel RAM to complete the merger agreement.

United Rentals alleges the repudiation is unwarranted and is a "naked ploy" to extract a lower price for the company at the expense of its shareholders.

In its lawsuit, United Rentals contends RAM wanted to buy United Rentals for less by exploiting the dramatic stock price drop that occurred after its intention to repudiate the merger agreement was leaked to a news organisation.

United Rentals alleges RAM is acting in bad faith, directly violating the merger agreement and does not have the right to pay a reverse break-up fee and leave the agreement.

It also claims RAM's financing sources are committed to fulfilling their contractual obligations and that the "specific performance" provision of the merger agreement requires RAM to consummate the merger.

New York law firm Orans, Elsen & Lupert LLP and the Wilmington, Delaware law firm of Rosenthal, Monhait & Goddess PA are representing United Rentals in this litigation.

The company claims to be the world's largest equipment rental company - its annual revenues are about USD3.9 billion, it has more than 12,000 employees and USD4 billion in rental fleet in 690 locations.

Recent data shows its fleet has 73,555 forklifts, 10,445 telehandlers and 72,401 self-propelled scissors and booms.
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It’s the year 2000. You’re in front of a boxy beige desktop waiting for the screeching ramblings of your dial-up to reach its finale. You go to Yahoo!, MSN, or maybe AOL, and start the mind-numbing process of finding your very specific needle in the digital haystack. And with web pages loading one image at a time, patience isn’t just a virtue – it’s a requirement!

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It’s the year 2000. You’re in front of a boxy beige desktop waiting for the screeching ramblings of your dial-up to reach its finale. You go to Yahoo!, MSN, or maybe AOL, and start the mind-numbing process of finding your very specific needle in the digital haystack. And with web pages loading one image at a time, patience isn’t just a virtue – it’s a requirement!

As clumsy as this early iteration seems now, this technology was the great enabler that allowed Forkliftaction to connect to the industry across the globe.  

To everyone who has connected with Forkliftaction in the past 25 years, thank you for your contribution to our success! We feel deeply touched by your words of encouragement.

What has Forkliftaction meant to you? Drop us a line.

Inside The News
This week Forkliftaction News is celebrating its 25th anniversary! A wonderful achievement given we launched at a time when just 6% of the world’s population were internet users, according to Internet World Stats . Over the coming weeks, we will be sharing stories about our history and rolling out more celebrations, so keep an eye out... Continue reading

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This week Forkliftaction News is celebrating its 25th anniversary! A wonderful achievement given we launched at a time when just 6% of the world’s population were internet users, according to Internet World Stats . Over the coming weeks, we will be sharing stories about our history and rolling out more celebrations, so keep an eye out... Continue reading

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It’s the year 2000. You’re in front of a boxy beige desktop waiting for the screeching ramblings of your dial-up to reach its finale. You go to Yahoo!, MSN, or maybe AOL, and start the mind-numbing process of finding your very specific needle in the digital haystack. And with web pages loading one image at a time, patience isn’t just a virtue – it’s a requirement!

As clumsy as this early iteration seems now, this technology was the great enabler that allowed Forkliftaction to connect to the industry across the globe.  

To everyone who has connected with Forkliftaction in the past 25 years, thank you for your contribution to our success! We feel deeply touched by your words of encouragement.

What has Forkliftaction meant to you? Drop us a line.