By Adriano Marchese

United Rentals terminated its $3.37 billion deal to buy H&E Equipment Services, leaving the company to a higher bidder.

Herc Holdings said Tuesday that it will acquire rental business H&E Equipment Services in a cash and stock deal, offering a 14% premium to United Rentals' January agreement. United Rentals said it does not intend to submit a revised bid for the company.

Herc said it was offering $104.89 a share, which includes $78.75 in cash and 0.1287 shares of Herc for each H&E share.

Ahead of the market open, shares for United Rentals fell 2.33% to $724, while H&E Equipment's stock rose 13% to $87.56. Shares for Herc were down 12% to $176.02.

"One of our key responsibilities as a management team is to be good stewards of our investors' capital and our decision not to increase our offer for H&E reflects our commitment to financial discipline," said United Rentals Chief Executive Matthew Flannery.

Combined, Herc and H&E are expected to accelerate their growth strategies and scale, giving them a more competitive edge in the equipment rental industry. The combined company would also be better equipped to serve more high-value projects from large national accounts, Herc Holdings said.

Under the merger agreement, H&E is required to pay a termination fee of about $63.5 million to United Rentals if H&E terminates its deal with Herc. Herc has agreed to pay the termination fee to United Rentals on behalf of H&E if the new deal dies.

United Rentals bills itself as the largest equipment rental company in the world with about 1,500 locations. Herc and H&E are closer in size, with $3.6 billion and about $1.5 billion in annual revenues, respectively.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

February 18, 2025 09:35 ET (14:35 GMT)

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