H&E Equipment Services, Inc. (NASDAQ: HEES) shares are on a significant pre-market uptick today following the announcement of a higher takeover bid. As of the latest pre-market check, HEES stock was surging by 11.36%, trading at $97.51.
Herc Holdings Presents Superior Proposal
Operating under the name H&E Rentals, H&E Equipment announced that Herc Holdings Inc. has submitted a final acquisition proposal to its board of directors. The offer, which is classified as a “Superior Proposal” under the terms of the current merger agreement with United Rentals, Inc., calls for the purchase of all outstanding HEES common shares using a mix of cash and Herc common stock.
Herc’s offer, which includes a fully prepared merger agreement and confirmed financial arrangements, is still open until 12:01 p.m. Eastern Time on February 24, 2025. A fixed exchange ratio of 0.1287 shares of Herc common stock per H&E Rentals share and (i) $78.75 per share in cash, subject to tax withholdings, are both included in the proposed transaction structure. An estimated $104.59 per HEES share may be obtained from this combination, given Herc’s closing stock price of $200.74 on February 14, 2025.
Response from United Rentals and Next Steps
Following the board’s assessment of Herc’s offer as superior, H&E Equipment notified United Rentals accordingly. United Rentals responded by legally waiving the four-business-day match period outlined in the current merger agreement and confirming in writing that it will not make a counteroffer. With this waiver, H&E Equipment is free to end its contract with United Rentals and perhaps complete a merger with Herc.
However, should H&E Equipment move forward with the merger swap, it will be required to pay a termination fee of $63,523,892 in accordance with the provisions of the United Rentals agreement. Herc Holdings has consented to pay this termination fee on behalf of H&E Rentals, with the knowledge that under certain situations related to a possible termination of their agreement, H&E may have to compensate Herc.
Market Performance and Industry Insights
In terms of market performance, HEES maintains an ST score of 47 on the industry screener, earning a “Bullish” rating within the Rental & Leasing Services sector. Investors interested in comparable high-performing stocks within the industry can explore additional insights through our ST screener link for informed investment decisions.