Equipment rental company United Rentals on Monday said that it had accepted a $4 billion takeover offer from private-equity fund Cerberus Capital Management.
United Rentals shares on Monday morning gained 63 cents, or 1.95% percent, trading at $33 on the New York Stock Exchange.
United Rentals shareholders will receive $34.50 per share, which represents a 6.6 percent premium to the stock's closing price on Friday.
Cerberus will also assume $2.6 billion of United Rental debt, bringing the total value of the acquisition to $6.6 billion.
Under the terms of the deal, United Rentals, which describes itself as the world's largest equipment rental company, may continue to solicit other bids through Aug. 31.
Citigroup Analyst David Raso wrote in a note to clients that it is possible, but not likely, that a rival bidder could emerge.
"Given URI has been available for three months, this [rival bidder] scenario may be less likely than in a surprise purchase announcement where an asset is suddenly put into play," Raso wrote. He upgraded United Rentals shares from "sell" to "hold."
On April 10, United Rentals said it was exploring options, including a sale of the company.
Its shares have risen 20 percent since the day before it said it was on the block. Over the same period, the Standard & Poor's 1500 Capital Goods Industry Group Index, of which United Rentals is a component, has risen 16 percent.
United Rentals' board of directors has approved the takeover. Shareholder approval is also required.
Affiliates of Apollo Management, which own some 18 of the voting power of United Rentals' stock, have agreed to vote their shares in favor of the deal.
The Greenwich, Connecticut-based company was advised by UBS Investment Bank.
United Rentals, with more than 690 rental locations in 48 states, Canada and Mexico, rents everything from backhoes and excavators for demolition work to welders and generators needed for pipe fabrication.
Cerberus, which is in the process of acquiring Chrysler Group in a $7.4 billion deal, is not the only private equity fund to show interest in the rental sector. In October, Swedish compressor and machinery maker Atlas Copco agreed to sell most of its U.S. equipment rental business to Ripplewood Holdings and Oak Hill Capital Management.