United Rental Buyout

United Rentals (URI)
Cerberus Capital Management
$6.6B Buyout - Terminated Deal

Summary - Timeline

Proposed buyout of equipment rental company

Announced 7.23.07

Deal repudiated by Buyer

Requests discussion re "recent unanticipated developments in the credit and financial markets"
Criticizes URI's filing its proxy statement without addressing Buyer comments
Presumably Buyer had issue with the "Specific Performance" paragraph in the Termination section of both the preliminary proxy statement and final proxy statement, which reflect URI's reading of the merger agreement but not Buyers

Response to Buyers suggestion that deal be renegotiated
"we are sorely disappointed that your organization is now looking to renegotiate our deal without cause or contractual support. Steve and Mike repeatedly represented at the time of our negotiations that Cerberus prided itself on not renegotiating its deals and should be viewed as being in the same league as other top-tier private equity firms."

"Parent and Merger Sub are not prepared to proceed with the acquisition of URI on the terms contemplated by the Agreement."
"the parties agreed that our maximum liability in the event that we elected not to consummate the transaction would be payment of the Parent Termination Fee (as defined in the Agreement) in the amount of $100 million."
Merger agreement 8.2(e)
"we see two paths forward ...
[1] [explore] .... a transaction between our companies on revised terms
[2] we are prepared to ... [pay] ... the $100 million Parent Termination Fee."

"Cerberus has specifically confirmed that there has not been a material adverse change at United Rentals"
"Having fulfilled all the closing conditions under the merger agreement, United Rentals is prepared to complete the transaction promptly."
"Cerberus has received binding commitment letters from its banks to provide financing for the transaction through required bridge facilities. [URI] currently believes that Cerberus banks stand ready to fulfill their contractual obligations."

* Note: these materials were first publicly disclosed via URI's Form 8-K filed on 11.14.07

Deal repudiated by Buyer

Requests discussion re "recent unanticipated developments in the credit and financial markets"
Criticizes URI's filing its proxy statement without addressing Buyer comments
Presumably Buyer had issue with the "Specific Performance" paragraph in the Termination section of both the preliminary proxy statement and final proxy statement, which reflect URI's reading of the merger agreement but not Buyers

Response to Buyers suggestion that deal be renegotiated
"we are sorely disappointed that your organization is now looking to renegotiate our deal without cause or contractual support. Steve and Mike repeatedly represented at the time of our negotiations that Cerberus prided itself on not renegotiating its deals and should be viewed as being in the same league as other top-tier private equity firms."

"Parent and Merger Sub are not prepared to proceed with the acquisition of URI on the terms contemplated by the Agreement."
"the parties agreed that our maximum liability in the event that we elected not to consummate the transaction would be payment of the Parent Termination Fee (as defined in the Agreement) in the amount of $100 million."
Merger agreement 8.2(e)
"we see two paths forward ...
[1] [explore] .... a transaction between our companies on revised terms
[2] we are prepared to ... [pay] ... the $100 million Parent Termination Fee."

"Cerberus has specifically confirmed that there has not been a material adverse change at United Rentals"
"Having fulfilled all the closing conditions under the merger agreement, United Rentals is prepared to complete the transaction promptly."
"Cerberus has received binding commitment letters from its banks to provide financing for the transaction through required bridge facilities. [URI] currently believes that Cerberus banks stand ready to fulfill their contractual obligations."

* Note: these materials were first publicly disclosed via URI's Form 8-K filed on 11.14.07

Financial

Legal

Merger Agreement

Merger agreement

Key terms

... the Company shall, with the assistance of Parent, prepare and file with the SEC the Proxy Statement. Parent, Merger Sub and the Company will cooperate with each other in the preparation of the Proxy Statement.
Buyer criticized URI's filing its proxy statements without responding to Buyer comments