GO
Loading...

United Rentals Sues to Force Buyout by Cerberus

United Rentals said Monday that it had filed a lawsuit seeking to compel Cerberus Capital Management to complete its $4 billion buyout of the equipment rental company.

United Rentals said last week that Cerberus was withdrawing its $34.50-per-share takeover offer, the latest casualty of a widespread credit crisis.

"United Rentals believes that the repudiation ... is nothing more than a naked ploy to extract a lower price at the expense of United Rentals' shareholders," the company said in a statement.

Cerberus was not immediately available for comment.

The lawsuit, filed in the Delaware Court of Chancery, contends Cerberus is violating the merger agreement and does not have the right to pay a break-up fee and walk away from the deal, United Rentals said.

The company said there was no financing barrier to completing the merger and that Cerberus had binding commitment letters from its financing sources.

"United Rentals believes that the financing sources stand ready to fulfill their contractual obligations," United Rentals said.

Cerberus said last week it had tried to renegotiate the buyout of United Rentals due to concerns about the debt and credit markets, but the company was unwilling to discuss new terms.

Cerberus has said that its liability is limited to a $100 million break-up fee.

Symbol
Price
 
Change
%Change
URI
---

Featured

Contact Law

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More