PRELIMINARY COPY - SUBJECT TO COMPLETION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RENTAL SERVICE CORPORATION
(Name of Registrant as Specified in Its Charter)
UNITED RENTALS, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transactions:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PRELIMINARY COPY - SUBJECT TO COMPLETION
[United Rentals Logo]
April [ ], 1999
Dear Rental Service Stockholder:
On April 5, 1999, United Rentals, Inc., through a wholly owned
subsidiary, commenced a $22.75 per share all cash tender offer for all
outstanding shares of Rental Service Corporation common stock. In addition,
United Rentals has proposed a second-step merger of the two companies
pursuant to which each share of Rental Service common stock not acquired in
the tender offer would be converted into the right to receive in cash the
highest price per share paid by United Rentals in the tender offer.
Following the merger, Rental Service would become a wholly owned subsidiary
of United Rentals.
As you know, NationsRent, Inc. and Rental Service previously
entered into a merger agreement in which each outstanding share of
NationsRent common stock would be converted into 0.355 of a share of Rental
Service common stock. In that transaction, you would continue to retain
your shares in the combined Rental Service/NationsRent, and NationsRent
stockholders would end up owning approximately 45% of the combined company.
In connection with the proposed NationsRent merger, Rental Service
has scheduled a special meeting of stockholders to be held at [ ] a.m.,
Eastern time, on [ ], 1999 at [location]. The Rental Service Board of
Directors is soliciting your vote to approve the proposed NationsRent
merger at that meeting. As discussed in the accompanying Proxy Statement,
we believe United Rentals' pending cash tender offer and proposed
second-step cash merger offer you a significant premium and more certain
value than the proposed NationsRent/Rental Service merger.
WE URGE YOU TO VOTE AGAINST THE PROPOSED NATIONSRENT MERGER
BECAUSE:
o United Rentals' offer provides a significant premium and
more certain value for your Rental Services shares than the
proposed NationsRent merger. Our offer provides you with
$22.75 per share in cash, representing a premium of $5.50
per Share (or approximately 32%) over the closing price of
Rental Service common stock on the last trading day prior to
the announcement of our offer.
o For you to be eligible to receive $22.75 per Rental Service
share in cash in the United Rentals offer, the proposed
NationsRent/Rental Service merger MUST NOT be approved by
the holders of a majority of the shares of Rental Service
common stock.
o Your vote AGAINST the NationsRent merger will send a strong
message to the Rental Service Board of Directors that you
want to preserve your opportunity to accept the superior
offer of United Rentals.
YOUR VOTE IS ESSENTIAL! IF YOU WANT THE OPPORTUNITY TO RECEIVE
$22.75 PER SHARE IN CASH IN THE UNITED RENTALS OFFER, VOTE AGAINST THE
PROPOSED NATIONSRENT MERGER BY SIGNING, DATING AND RETURNING THE
ACCOMPANYING GOLD PROXY CARD TODAY.
A vote against the proposed NationsRent merger will not obligate
you to tender your Shares in the United Rentals Offer. However, it will
give you an opportunity to decide for yourself whether the United
Rentals offer is in your best interest.
Even if you previously have submitted a proxy card furnished by the
Rental Service Board, it is not too late to change your vote by simply
signing, dating and returning the enclosed GOLD proxy card today.
WE URGE YOU TO PROTECT YOUR INTERESTS -- PLEASE SIGN, DATE AND
RETURN THE GOLD PROXY CARD TODAY.
Thank you for your consideration and support.
Sincerely,
Bradley S. Jacobs
Chairman and Chief Executive Officer
United Rentals, Inc.
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IMPORTANT
1. If your Rental Service shares are held in your own name, please
sign, date and mail the enclosed GOLD proxy card to Georgeson &
Company Inc. ("Georgeson") in the postage-paid envelope provided.
2. If your Rental Service shares are held in "street-name," only your
broker or bank can vote your shares and only upon receipt of your
specific instructions. If your shares are held in "street- name,"
deliver the enclosed GOLD proxy card to your broker or bank and
contact the person responsible for your account to vote on your
behalf and to ensure that a GOLD proxy card is submitted on your
behalf. United Rentals urges you to confirm in writing your
instructions to the person responsible for your account and to
provide a copy of those instructions to United Rentals in care of
Georgeson & Company Inc., Wall Street Plaza, New York, NY 10005 so
that United Rentals will be aware of all instructions given and can
attempt to ensure that such instructions are followed.
3. Only stockholders of record on ________, 1999 are entitled to vote
at the special meeting of Rental Service stockholders. United
Rentals urges each stockholder to ensure that the record holder of
his or her shares, signs, dates and returns the enclosed proxy card
as soon as possible.
Do not sign or return any [white] proxy card you may receive from
Rental Service.
If you have any questions or need assistance in voting your shares,
please call:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: 1-800-223-2064
THIS PROXY STATEMENT RELATES SOLELY TO THE SOLICITATION OF PROXIES
IN OPPOSITION TO THE PROPOSED NATIONSRENT MERGER AND IS NEITHER A REQUEST
FOR THE TENDER OF RENTAL SERVICE COMMON STOCK NOR AN OFFER WITH RESPECT
THERETO. THE UNITED RENTALS TENDER OFFER IS BEING MADE ONLY BY MEANS OF AN
OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL, WHICH HAVE BEEN
SEPARATELY MAILED TO RENTAL SERVICE STOCKHOLDERS.
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PRELIMINARY COPY - SUBJECT TO COMPLETION
SPECIAL MEETING OF STOCKHOLDERS
OF
RENTAL SERVICE CORPORATION
TO BE HELD ON [ ], 1999
PROXY STATEMENT
OF
UNITED RENTALS, INC.
SOLICITATION OF PROXIES
IN OPPOSITION TO THE PROPOSED MERGER OF
RENTAL SERVICE CORPORATION AND NATIONSRENT, INC.
This Proxy Statement and the enclosed GOLD proxy card are furnished
by United Rentals, Inc., a Delaware corporation ("United Rentals"), in
connection with its solicitation of proxies to be used at a special meeting
(the "Special Meeting") of stockholders of Rental Service Corporation, a
Delaware corporation ("Rental Service"), to be held at [ ] a.m., Eastern
time, on [ ], 1999 and at any adjournments, postponements or reschedulings
thereof. The Special Meeting is scheduled to be held at [
]. Pursuant to this Proxy Statement, United Rentals is
soliciting proxies from holders of shares of common stock, par value $.01
per share, of Rental Service (the "Shares") to vote AGAINST the proposed
merger of NationsRent, Inc., a Delaware corporation ("NationsRent"), with
and into Rental Service (such proposed merger, the "Proposed NationsRent
Merger"). Rental Service has set [ ], 1999 as the record date for
determining those stockholders who will be entitled to vote at the Special
Meeting. This Proxy Statement and the enclosed GOLD proxy are first being
sent or given to stockholders of Rental Service on or about April __, 1999.
The principal executive offices of Rental Service are located at 6929 E.
Greenway Pkwy., Suite 200, Scottsdale, Arizona 85254.
On April 5, 1999, UR Acquisition Corporation ("UR Acquisition"), a
Delaware corporation and a wholly owned subsidiary of United Rentals,
commenced a tender offer (the "Offer" or the "United Rentals Offer") for
all of the outstanding Shares, at a price of $22.75 per Share, net to the
seller in cash. The terms and conditions of the United Rentals Offer are
set forth in an Offer to Purchase (the "United Rentals Offer to Purchase")
which has been included as an exhibit to a Tender Offer Statement on
Schedule 14D-1 filed by United Rentals with the Securities and Exchange
Commission (the "Commission") on April 5, 1999. The United Rentals Offer of
$22.75 per Share in cash represents a premium of $5.50 per Share (or
approximately 32%) over the closing price per Share on the last trading day
prior to the announcement of the Offer. Stockholders are referred to the
United Rentals Offer to Purchase for a more detailed description of the
terms and conditions of the United Rentals Offer.
The purpose of the United Rentals Offer is to enable United Rentals
to acquire control of, and the entire equity interest in, Rental Service.
The Offer, as the first step in the acquisition of Rental Service, is
intended to facilitate the acquisition of all the Shares. United Rentals is
seeking to negotiate with Rental Service with respect to the acquisition of
Rental Service by United Rentals, including seeking to have Rental Service
consummate a merger or similar business combination with UR Acquisition or
another direct or indirect wholly owned subsidiary of United Rentals (the
"Proposed United Rentals Merger"). The purpose of the Proposed United
Rentals Merger is to acquire all Shares not tendered and purchased pursuant
to the Offer or otherwise. Pursuant to the Proposed United Rentals Merger,
each then outstanding Share (other than Shares owned by UR Acquisition,
United Rentals or any of their subsidiaries, Shares held in the treasury of
Rental Service and Shares owned by stockholders who perfect any available
appraisal rights under the Delaware General Corporation Law, as amended
(the "DGCL")), would be converted into the right to receive an amount in
cash equal to the highest price paid per Share in the Offer.
Conditions to the United Rentals Offer
The United Rentals Offer is conditioned upon, among other things,
(1) there being validly tendered and not withdrawn prior to the expiration
of the United Rentals Offer that number of shares which constitutes a
majority of the Shares outstanding on a fully diluted basis, (2) the
stockholders of Rental Service not having approved the Agreement and Plan
of Merger, dated as of January 20, 1999 (the "NationsRent Merger
Agreement"), between Rental Service and NationsRent, (3) UR Acquisition
being satisfied, in its sole discretion, that the NationsRent Merger
Agreement has been terminated, and Rental Service having entered into a
definitive merger agreement with United Rentals and UR Acquisition to
provide for the acquisition of Rental Service pursuant to the United
Rentals Offer and the Proposed United Rentals Merger, (4) UR Acquisition
being satisfied, in its sole discretion, that the provisions of Section 203
of the DGCL, are inapplicable to the United Rentals Offer and the Proposed
United Rentals Merger, (5) Rental Service not having entered into or
effectuated any agreement or transaction with any person or entity having
the effect of impairing UR Acquisition's ability to acquire Rental Service
or otherwise diminishing the expected economic value to UR Acquisition of
the acquisition of Rental Service, (6) any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
having expired or been terminated prior to the expiration of the United
Rentals Offer, (7) the option held by NationsRent to purchase up to 19.9%
of the outstanding Shares having been terminated or invalidated without any
Shares having been issued thereunder, and (8) the termination fee and
expense reimbursement provisions provided for in the NationsRent Merger
Agreement having been invalidated, or the obligation to pay any amounts
pursuant to such provisions having been terminated, without any termination
fee or expense reimbursement, or any portion thereof, having been paid by
Rental Service or any of its affiliates pursuant to the NationsRent Merger
Agreement or otherwise. The United Rentals Offer is also subject to other
terms and conditions set forth in the United Rentals Offer to Purchase. See
the Introduction to, and Section 14 of, the United Rentals Offer to
Purchase. As described in the United Rentals Offer to Purchase, the
condition described in clause (4) above would be satisfied upon approval by
Rental Service's Board of Directors of the United Rentals Offer and the
Proposed United Rentals Merger. In addition, the condition described in
clause (2) above would be satisfied if stockholders of Rental Service do
not approve the NationsRent Merger Agreement.
United Rentals filed a complaint against Rental Service, the
members of Rental Service's Board of Directors and NationsRent in the
Chancery Court of the State of Delaware (the "Delaware Litigation"),
alleging, among other things, breaches of fiduciary duties by the Rental
Service Board in connection with the NationsRent Merger Agreement. The
complaint also seeks an order, among other things, (i) invalidating the
NationsRent Option and the NationsRent Termination Fee (each as defined
below) and (ii) compelling the Rental Service Board to approve the United
Rentals Offer and the Proposed United Rentals Merger for purposes of
Section 203 of the DGCL. On April 8, 1999, the Delaware Chancery Court
granted United Rentals' motion for expedited discovery and set May 17, 1999
for a hearing to consider plaintiffs' motion for a preliminary injunction
in connection with the foregoing. United Rentals has also filed a complaint
against Rental Service, NationsRent and James L. Kirk, the Chairman and
Chief Executive Officer of NationsRent, in the United States District Court
for the District of Connecticut (the "Connecticut Litigation", and,
collectively with the Delaware Litigation, the "Litigation") alleging,
among other things, violations of the proxy and tender offer rules. See
"CERTAIN LITIGATION." While United Rentals believes its claims in the
Litigation are meritorious, there can be no assurance that it will prevail
in such litigation.
There can be no assurance as to the timing or satisfaction of the
conditions to the United Rentals Offer. While certain of such conditions
are within the control of the Rental Service Board, certain of the
conditions are outside of the control of the Rental Service Board, such as
the invalidation of the NationsRent Option and NationsRent Termination Fee.
However, United Rentals intends to vigorously pursue its claims in the
Delaware Litigation as expeditiously as possible and to attempt to ensure
that further steps toward consummation of the Proposed NationsRent Merger
are not taken. See "CERTAIN LITIGATION" below. By voting against the
Proposed NationsRent Merger, stockholders can demonstrate their support for
the proposed combination of Rental Service and United Rentals. A vote
against the Proposed NationsRent Merger moves all Rental Service
stockholders closer to being able to benefit from the United Rentals Offer.
Absent the various takeover defenses and other impediments described above,
United Rentals believes that there is no reason why the United Rentals
Offer could not close at least as quickly as the Proposed NationsRent
Merger.
While United Rentals is committed to helping Rental Service's
stockholders realize the significant premium and more certain value of the
United Rentals Offer and the Proposed United Rentals Merger, until the
conditions to the United Rentals Offer are satisfied, United Rentals will
not purchase any Shares pursuant to the United Rentals Offer. Accordingly,
a vote for the Proposed NationsRent Merger could leave Rental Service
stockholders without a viable alternative for an acquisition of Rental
Service.
Certain Information Concerning the Proposed NationsRent Merger
The NationsRent Merger Agreement provides that in the Proposed
NationsRent Merger, each outstanding share of the NationsRent Common Stock,
other than those beneficially owned by Rental Service or NationsRent, would
be converted into 0.355 of a Share of Rental Service Common Stock.
Stockholders of Rental Service would continue to retain their Shares after
the Proposed NationsRent Merger. As a result of the Proposed NationsRent
Merger, NationsRent stockholders would end up owning approximately 45% of
the combined companies. The only conditions to the consummation of the
Proposed NationsRent Merger are the following: (1) approval and adoption of
the NationsRent Merger Agreement by the stockholders of Rental Service and
NationsRent, (2) the approval of an increase in the number of authorized
Shares by the stockholders of Rental Service, (3) receipt of all regulatory
approvals, (4) absence of any law, order or judgment of any governmental
authority that restrains, enjoins or otherwise prohibits the Proposed
NationsRent Merger or that would have a material adverse effect on the
combination of Rental Service and NationsRent following the Proposed
NationsRent Merger, (5) effectiveness of the registration statement
registering the Shares to be issued in the Proposed NationsRent Merger, (6)
authorization of the listing of such Shares on the New York Stock Exchange
(the "NYSE"), (7) receipt of all state securities and "blue sky" permits
and approvals, (8) accuracy of the representations and warranties of Rental
Service and NationsRent set forth in the NationsRent Merger Agreement in
all material respects, (9) performance by Rental Service and NationsRent of
their respective material obligations under the NationsRent Merger
Agreement, (10) receipt by Rental Service and NationsRent of all material
consents required from third parties, and (11) receipt by Rental Service
and NationsRent of opinions of their respective legal counsel with respect
to the qualification of the Proposed NationsRent Merger as a
"reorganization" under the Internal Revenue Code of 1986, as amended.
The NationsRent Merger Agreement also provides that the termination
of the NationsRent Merger Agreement by either party under certain
circumstances specified in the NationsRent Merger Agreement, including if
Rental Service stockholders do not approve the Proposed NationsRent Merger
at the Special Meeting, or if the Rental Service Board withdraws or
adversely modifies its approval or recommendation to stockholders of the
Proposed NationsRent Merger following an announcement of a proposed
transaction such as the United Rentals Offer or fails to reconfirm its
recommendation within 10 days if so requested by NationsRent, or if any
person acquires 40% or more of the outstanding Shares, will require Rental
Service to pay NationsRent $35 million as a termination fee and an
additional $5 million in expenses (the "NationsRent Termination Fee").
In connection with the execution of the NationsRent Merger
Agreement, Rental Service also entered into an option agreement with
NationsRent (the "NationsRent Option Agreement"). Pursuant to the
NationsRent Option Agreement, Rental Service granted to NationsRent an
option (the "NationsRent Option") to purchase 4,795,431 Shares (subject to
certain adjustments), or approximately 19.9% of Rental Service's issued and
outstanding Shares on January 19, 1999, at an exercise price of $23.25 per
Share, subject to certain adjustments; provided, that, in no case will the
total profit realized by NationsRent under the NationsRent Option and the
NationsRent Termination Fee (not including the expense reimbursement
provisions thereof) exceed $35 million. The NationsRent Option becomes
exercisable upon the occurrence of any event that would result in
NationsRent being entitled to a termination fee under the NationsRent
Merger Agreement.
The foregoing description of the NationsRent Merger Agreement and
the NationsRent Option Agreement is qualified in its entirety by reference
to the full text of the NationsRent Merger Agreement and the NationsRent
Option Agreement, copies of which have been included by NationsRent as
exhibits to NationsRent's Current Report on Form 8-K, filed with the
Commission on April 7, 1999.
The purpose of the solicitation made by this Proxy Statement is to
enable Rental Service stockholders to decide for themselves whether the
United Rentals Offer is superior to the Proposed NationsRent Merger and to
act in their own best interests.
United Rentals stands ready to discuss its acquisition proposal
with Rental Service.
IMPORTANT
IF YOU WANT THE UNITED RENTALS OFFER TO SUCCEED, WE URGE YOU TO
PROMPTLY SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY TO VOTE AGAINST THE
PROPOSED NATIONSRENT MERGER.
REJECTION OF THE PROPOSED NATIONSRENT MERGER IS A CRITICAL STEP IN
SECURING THE SUCCESS OF THE UNITED RENTALS OFFER. HOWEVER, YOU MUST TENDER
YOUR SHARES PURSUANT TO THE UNITED RENTALS OFFER IF YOU WISH TO PARTICIPATE
IN THE UNITED RENTALS OFFER. YOUR VOTE AGAINST THE PROPOSED NATIONSRENT
MERGER DOES NOT OBLIGATE YOU TO TENDER YOUR SHARES PURSUANT TO THE UNITED
RENTALS OFFER.
EVEN IF YOU HAVE ALREADY SENT A PROXY TO THE BOARD OF DIRECTORS OF
RENTAL SERVICE, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. YOU MAY REVOKE
THAT PROXY AND VOTE AGAINST THE PROPOSED NATIONSRENT MERGER BY SIGNING,
DATING AND MAILING THE ENCLOSED GOLD PROXY IN THE ENCLOSED ADDRESSED
ENVELOPE. NO POSTAGE IS NECESSARY IF YOUR PROXY IS MAILED IN THE UNITED
STATES.
THIS PROXY STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF SHARES
NOR AN OFFER WITH RESPECT THERETO. SUCH AN OFFER WITH RESPECT TO THE SHARES
IS MADE ONLY THROUGH THE UNITED RENTALS OFFER TO PURCHASE AND RELATED
LETTER OF TRANSMITTAL.
BACKGROUND OF THE UNITED RENTALS OFFER
In the ordinary course of United Rentals' long-term strategic
review process, United Rentals is continuously involved in discussions
relating to acquisitions of varying size and due diligence investigations
of several acquisition candidates. United Rentals generally seeks to
acquire companies of various sizes, including relatively large companies to
serve as platforms for new regional clusters of equipment rental locations
and smaller companies to complement existing or anticipated locations.
In December 1998, a representative of Goldman, Sachs & Co., United
Rentals' financial advisor, acting on behalf of United Rentals, telephoned
Martin R. Reid, Chairman of the Board and Chief Executive Officer of Rental
Service, to arrange a meeting. On January 15, 1999, such representative met
with Mr. Reid and Robert M. Wilson, Executive Vice President, Chief
Financial Officer, Secretary and Treasurer of Rental Service. At such
meeting, such representative asked Mr. Reid whether Rental Service was
interested in discussing a business combination with United Rentals and Mr.
Reid stated that Rental Service was not for sale.
On January 21, 1999, Rental Service and NationsRent announced that
they had entered into the NationsRent Merger Agreement and the NationsRent
Option Agreement.
On March 30, 1999, United Rentals (North America), Inc., a direct
wholly owned subsidiary of United Rentals, purchased 100 Shares in a market
transaction effected on the NYSE at a price of $16 13/16 per Share plus
brokerage commissions and related expenses.
On April 3, 1999, at a special meeting of the Board of Directors of
United Rentals, such Board unanimously approved the making of the United
Rentals Offer.
On April 5, 1999, United Rentals and UR Acquisition commenced the
Offer and Bradley S. Jacobs, Chairman of the Board and Chief Executive
Officer of United Rentals, sent the following letter to Mr. Reid regarding
a proposed business combination between Rental Service and United Rentals.
April 5, 1999
Mr. Martin R. Reid
Chairman of the Board and Chief Executive Officer
Rental Service Corporation
6929 East Greenway Parkway, Suite 200
Scottsdale, Arizona 85254
Dear Marty:
United Rentals, Inc. is publicly announcing today a cash tender
offer to acquire all of the outstanding shares of Rental Service
Corporation at $22.75 per share. Our offer represents approximately a 32%
premium over your company's closing market price on Thursday, April 1,
1999. We are also proposing that, upon consummation of the tender offer,
United Rentals and Rental Service enter into a merger in which each
remaining Rental Service share will be exchanged for $22.75 in cash. In
connection with our Offer, we have received a commitment letter from
Goldman Sachs Credit Partners, L.P. to provide $2 billion in financing for
the purchase of all of Rental Service's shares pursuant to our tender offer
and the refinancing of Rental Service's existing debt, as well as for other
corporate purposes.
The combination of United Rentals and Rental Service would give us
an unparalleled capacity to serve customers in 42 states, Canada and
Mexico. Together we would be able to offer for rent over 400,000 pieces of
equipment, with an original cost of over $3 billion, to more than one
million customers through a network of over 700 locations. Our combined
companies would have a broader geographic diversification and excellent
opportunities to achieve greater operating efficiencies through economies
of scale. In addition, the combined operations would provide significant
opportunities for the employees of Rental Service to expand their
professional careers.
Our offer is subject to certain conditions, including the valid
tender of at least a majority of Rental Service's shares, termination of
the merger agreement between Rental Service and NationsRent, Inc., the
execution of a definitive merger agreement between Rental Service and
United Rentals, the termination or invalidation of the option held by
NationsRent to purchase up to 19.9% of Rental Service's shares, the
termination or invalidation of the termination fee obligation provided for
in Rental Service's merger agreement with NationsRent, the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, the approval of our offer and our proposed merger
by your Board of Directors, and Rental Service not taking any action that
would impair United Rentals' ability to acquire Rental Service or otherwise
diminish the value to United Rentals of Rental Service. The complete
details of our tender offer will be set forth in a filing to be made today
with the Securities and Exchange Commission.
We appreciate that you will want to present our proposal to your
Board of Directors for its careful consideration. We feel confident that
after such consideration, your Board will recognize the fairness and
certainty of the value that we are offering your stockholders.
We are prepared to meet with you and your directors, at your
earliest convenience, to discuss our proposal and to answer relevant
questions.
Sincerely,
/s/ Bradley S. Jacobs
Bradley S. Jacobs
Chairman and Chief Executive Officer
On April 5, 1999, United Rentals commenced the Delaware Litigation
against Rental Service, the members of Rental Service's Board of Directors
and NationsRent in the Chancery Court of the State of Delaware, alleging,
among other things, breaches of fiduciary duties by the Rental Service
Board in connection with the NationsRent Merger Agreement. Such litigation
seeks an order, among other things, (i) invalidating the NationsRent Option
and the NationsRent Termination Fee and (ii) compelling the Rental Service
Board to approve the United Rentals Offer and the Proposed United Rentals
Merger for purposes of Section 203 of the DGCL. On April 8, 1999, the
Delaware Chancery Court granted United Rentals' motion for expedited
discovery and set May 17, 1999 for a hearing to consider plaintiffs' motion
for a preliminary injunction in connection with the foregoing.
On April 7, 1999, United Rentals also commenced litigation against
Rental Service, NationsRent and James L. Kirk, the Chairman and Chief
Executive Officer of NationsRent, in the United States District Court for
the District of Connecticut alleging, among other things, violations of the
federal proxy and tender offer rules.
REASONS TO VOTE AGAINST THE PROPOSED NATIONSRENT MERGER
United Rentals urges you to vote your Shares AGAINST the Proposed
NationsRent Merger for the following reasons:
|X| A VOTE AGAINST THE PROPOSED NATIONSRENT MERGER
GIVES YOU THE OPPORTUNITY TO RECEIVE A
SIGNIFICANT PREMIUM AND MORE CERTAIN VALUE FOR
YOUR SHARES.
The United Rentals Offer, if consummated, provides you with the
certainty of $22.75 per Share in cash - the Proposed NationsRent Merger
leaves you with your existing Rental Service Shares and provides no
certainty of value. The $22.75 per Share in cash you would receive in the
Offer or the Proposed United Rentals Merger represents a premium of $5.50
price per Share (or approximately 32%) over the closing price for the
Shares on April 1, 1999, the last trading day before the announcement of
the Offer. On the other hand, during the period from the day before the
announcement of the Proposed NationsRent Merger through April 1, 1999, the
value of your Shares has declined by nearly 26%.
In the Proposed NationsRent Merger, the Board of Directors of the
surviving corporation will consist of nine members, four of whom will be
designated by NationsRent, and four of whom will be designated by Rental
Service, with the final director to be designated by NationsRent with the
consent of Rental Service, which cannot be unreasonably withheld. Also, in
the NationsRent Merger Agreement, Rental Service has acknowledged that the
Proposed NationsRent Merger constitutes a "change of control" for purposes
of certain Rental Service compensation and benefit plans. In essence, by
approving the NationsRent Merger you may be losing control of your company
without any assurance of receiving the highest possible value for your
Shares.
|X| A VOTE AGAINST THE PROPOSED NATIONSRENT MERGER SENDS A
STRONG MESSAGE TO THE RENTAL SERVICE BOARD OF DIRECTORS THAT
YOU WANT TO PRESERVE YOUR OPPORTUNITY TO ACCEPT THE UNITED
RENTALS OFFER, WHICH PROVIDES A SIGNIFICANT PREMIUM AND MORE
CERTAIN VALUE THAN THE PROPOSED NATIONSRENT MERGER.
By voting against the Proposed NationsRent Merger, stockholders can
demonstrate their support for the proposed combination of Rental Service
and United Rentals. A vote against the Proposed NationsRent Merger moves
Rental Service stockholders closer to being able to benefit from the United
Rentals Offer.
A vote against the Proposed Rental Service Merger will not obligate
you to tender your Shares pursuant to the United Rentals Offer. However, it
will give you an opportunity to decide for yourself whether the United
Rentals Offer is in your best interest. On the other hand, if Rental
Service stockholders approve the Proposed NationsRent Merger, it is likely
that the Proposed NationsRent Merger will be consummated.
|X| A VOTE AGAINST THE PROPOSED NATIONSRENT
MERGER WILL SATISFY ONE OF THE CONDITIONS TO
THE UNITED RENTALS OFFER.
One condition of the United Rentals Offer is that Rental Service
stockholders do not approve the NationsRent Merger. United Rentals will not
acquire any Shares in the United Rentals Offer unless this condition is
satisfied. Thus, a vote against the NationsRent Merger moves all Rental
Service stockholders closer to being able to receive $22.75 per Share in
cash. For a description of certain other conditions of the United Rentals
Offer, see "Conditions to the United Rentals Offer."
While United Rentals is committed to helping Rental Service
stockholders realize the significant premium and more certain value of the
United Rentals transaction, until the conditions to the United Rentals
Offer are satisfied, United Rentals will not purchase Shares pursuant to
the Offer. Accordingly, a vote for the Proposed NationsRent Merger could
leave Rental Service stockholders without a viable alternative for an
acquisition of Rental Service.
OBSTACLES TO THE UNITED RENTALS OFFER CREATED BY
THE RENTAL SERVICE BOARD OF DIRECTORS
You should be aware that the Board of Directors of Rental Service
has taken several actions in connection with the Proposed NationsRent
Merger which create barriers against any competing proposals (including the
United Rentals Offer) and thus hinder your ability to receive the maximum
value for your Shares.
The Rental Service Board of Directors Approved the NationsRent
Option Agreement. Concurrently with the execution of the NationsRent Merger
Agreement, and with the approval of the Rental Service Board, NationsRent
and Rental Service entered into the NationsRent Option Agreement granting
NationsRent the right to purchase, under certain circumstances, up to
4,795,431 Shares (representing 19.9% of the outstanding Shares at the time
the NationsRent Option Agreement was entered into), at an exercise price of
$23.25 per Share, subject to certain adjustments, provided that, in no case
will the total profit realized by NationsRent under the NationsRent Option
and the NationsRent Termination Fee (not including the expense
reimbursement provisions thereof) exceed $35 million. By entering into the
NationsRent Option Agreement, the Rental Service Board of Directors created
a significant obstacle to your receiving the maximum value for your Shares,
and has agreed to potentially dilute your equity interest in Rental
Service, which could lower the value of your Shares.
The Rental Service Board of Directors Approved the NationsRent
Termination Fee. In the NationsRent Merger Agreement, Rental Service agreed
to pay NationsRent the NationsRent Termination Fee of $40 million
(including $5 million of expense reimbursement) under certain circumstances
involving a termination of the NationsRent Merger Agreement, including if
Rental Service stockholders do not approve the Proposed NationsRent Merger
at the Special Meeting, or if the Rental Service Board of Directors
withdraws or adversely modifies its approval or recommendation to
stockholders of the Merger or fails to reconfirm its recommendation within
10 days if so requested by NationsRent, or if any person acquires 40% or
more of the outstanding Shares. In other words, if Rental Service
stockholders vote against approval of the NationsRent Merger Agreement,
Rental Service agreed to pay NationsRent the NationsRent Termination Fee of
$40 million (including $5 million of expense reimbursement). United Rentals
believes that the NationsRent Termination Fee constitutes a substantial
additional obstacle to your receiving the maximum value for your Shares.
United Rentals has commenced litigation challenging certain aspects
of these actions. See "CERTAIN LITIGATION."
YOU CAN TAKE IMMEDIATE STEPS TO HELP OBTAIN
THE MAXIMUM VALUE FOR YOUR SHARES
(1) Return your GOLD proxy and vote AGAINST the proposed
NationsRent Merger; and
(2) Make your views known to the Rental Service Board of Directors.
By taking these steps, you will give the Rental Service Board of
Directors a clear message that they should take all necessary
actions to remove all obstacles to the United Rentals Offer, which
provides a significant premium and more certain value than the
Proposed NationsRent Merger.
A vote against the Proposed NationsRent Merger will not obligate
you to tender your Shares in the United Rentals Offer. However, we believe
that a vote against the Proposed NationsRent Merger will better enable
Rental Service stockholders to consider the United Rentals Offer, and is
essential to secure the success of the United Rentals Offer.
CERTAIN LITIGATION
On April 5, 1999, United Rentals filed a complaint against Rental
Service, the members of Rental Service's Board of Directors and NationsRent
in the Chancery Court of the State of Delaware, alleging, among other
things, breaches of fiduciary duties by the Rental Service Board in
connection with the NationsRent Merger Agreement. The complaint seeks an
order, among other things, (i) invalidating the NationsRent Option and the
NationsRent Termination Fee and (ii) compelling the Rental Service Board to
approve the United Rentals Offer and the Proposed United Rentals Merger for
purposes of Section 203 of the DGCL. On April 8, 1999, the Delaware
Chancery Court granted United Rentals' motion for expedited discovery and
set May 17, 1999 for a hearing to consider plaintiffs' motion for a
preliminary injunction in connection with the foregoing.
On April 7, 1999, United Rentals also filed a complaint against
Rental Service, NationsRent and James L. Kirk, the Chairman and Chief
Executive Officer of NationsRent, in the United States District Court for
the District of Connecticut alleging, among other things, violations of the
federal proxy and tender offer rules.
VOTING INFORMATION
According to the Rental Service Annual Report on Form 10-K for the
year ended December 31, 1998 (the "Rental Service 10-K"), as of February
26, 1999, there were outstanding 24,123,392 Shares. Approval of the
Proposed NationsRent Merger requires the affirmative vote of a majority of
all outstanding Shares voting separately as a class. Broker non-votes and
abstentions will have the same effect as a vote against the Proposed
NationsRent Merger.
The accompanying GOLD proxy will be voted in accordance with the
stockholder's instructions on such GOLD proxy. Stockholders may vote
against the Proposed NationsRent Merger by marking the proper box on the
GOLD proxy. If no instructions are given, the GOLD proxy will be voted
AGAINST the Proposed NationsRent Merger.
Whether or not you plan to attend the Special Meeting, we urge you
to vote AGAINST the Proposed NationsRent Merger on the enclosed GOLD proxy
and immediately mail it in the enclosed envelope. You may do this even if
you have already sent in a different proxy solicited by Rental Service's
Board of Directors. It is your latest dated proxy that counts. Execution
and delivery of a proxy by a record holder of shares will be presumed to be
a proxy with respect to all Shares held by such record holder unless the
proxy specifies otherwise.
You may revoke your proxy at any time prior to its exercise by
attending the Special Meeting and voting in person, by submitting a duly
executed later dated proxy or by submitting a written notice of revocation.
Unless revoked in the manner set forth above, duly executed proxies in the
form enclosed will be voted at the Special Meeting on the Proposed
NationsRent Merger in accordance with your instructions. In the absence of
such instructions, such proxies will be voted AGAINST the Proposed
NationsRent Merger.
UNITED RENTALS STRONGLY RECOMMENDS A VOTE AGAINST THE
PROPOSED NATIONSRENT MERGER.
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND RETURN THE GOLD
PROXY TODAY.
IF YOU ALREADY HAVE SENT A PROXY TO THE BOARD OF DIRECTORS OF
RENTAL SERVICE, YOU MAY REVOKE THAT PROXY AND VOTE AGAINST THE
PROPOSED NATIONSRENT MERGER BY SIGNING, DATING AND MAILING THE
ENCLOSED GOLD PROXY.
If you have any questions about the voting of Shares, please call:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: 1-800-223-2064
SOLICITATION OF PROXIES
Proxies will be solicited by mail, telephone, telefax, telegraph,
the internet, newspapers and other publications of general distribution and
in person. Directors, officers and certain employees of United Rentals and
the other participants listed on Schedule II hereto may assist in the
solicitation of proxies without any additional remuneration (except as
otherwise set forth in this Proxy Statement).
United Rentals has retained Georgeson & Company Inc. ("Georgeson")
for solicitation and advisory services in connection with solicitations
relating to the Special Meeting, for which Georgeson is to receive a fee up
to $[ ] in connection with the solicitation of proxies for the Special
Meeting. United Rentals has also agreed to reimburse Georgeson for
out-of-pocket expenses and to indemnify Georgeson against certain
liabilities and expenses, including reasonable legal fees and related
charges. Georgeson will solicit proxies for the Special Meeting from
individuals, brokers, banks, bank nominees and other institutional holders.
Directors, officers and certain employees of United Rentals may assist in
the solicitation of proxies without any additional remuneration. The entire
expense of soliciting proxies for the Special Meeting by or on behalf of
United Rentals is being borne by United Rentals. Georgeson is also acting
as Information Agent in connection with the Offer, for which Georgeson will
be paid customary compensation in addition to reimbursement of reasonable
out-of-pocket expenses.
United Rentals has retained Goldman, Sachs & Co. (the "Dealer
Managers" or "Goldman Sachs") to act as the Dealer Managers in connection
with the Offer and to provide certain financial advisory services to United
Rentals in connection with its effort to acquire Rental Service. Pursuant
to its engagement letter with Goldman Sachs, United Rentals has agreed to
pay Goldman Sachs a transaction fee of $5.75 million if United Rentals or
an affiliate of United Rentals acquires at least 50% of the Shares or
Rental Service's assets (based on the book value thereof) in one or more
transactions. If United Rentals or an affiliate of United Rentals acquires
less than 50% of the Shares or Rental Service's assets (based on the book
value thereof), United Rentals will pay Goldman Sachs a mutually acceptable
transaction fee. Each such transaction fee is payable in cash upon
consummation of any such acquisition. In the event that Goldman Sachs'
services are terminated by United Rentals and, prior to March 20, 2000,
United Rentals or an affiliate thereof enters into an agreement with
respect to the acquisition of all or a majority of the Shares or Rental
Service's assets which is eventually consummated by United Rentals or an
affiliate thereof, the applicable transaction fee described above would be
payable to Goldman Sachs upon such consummation. United Rentals has also
agreed to pay to Goldman Sachs an advisory fee of $2 million payable in
cash upon commencement of the Offer and an additional advisory fee of $3
million payable in cash upon consummation of the Offer. Goldman Sachs has
agreed to credit United Rentals with approximately $1.33 million pursuant
to any investment banking transactions other than the Offer or the Proposed
United Rentals Merger that are consummated prior to April 3, 2000. United
Rentals has also agreed to reimburse Goldman Sachs for its reasonable
out-of-pocket expenses, including the reasonable fees and expenses of its
legal counsel, plus any sales, use or similar taxes (including additions to
such taxes, if any), incurred in connection with its engagement, and to
indemnify Goldman Sachs against certain liabilities and expenses in
connection with its engagement, including certain liabilities under the
federal securities laws. Out-of-pocket expenses (other than sales, use or
similar taxes) including attorneys' fees cannot exceed $75,000 without the
prior written consent of United Rentals. Such limitation does not apply to
United Rentals' obligation to indemnify Goldman Sachs in connection with
its engagement. In connection with the Offer, a subsidiary of United
Rentals (the "Borrower") has executed a commitment letter dated as of April
4, 1999 (the "Commitment Letter"), with Goldman Sachs Credit Partners L.P.
("GSCP") pursuant to which GSCP will provide the Borrower with financing in
an aggregate amount up to $2 billion. GSCP has committed to provide the
financing upon the terms and subject to the conditions set forth in the
Commitment Letter, and GSCP has committed to form a syndicate of financial
institutions acceptable to the Borrower upon the terms and subject to the
conditions set forth in the Commitment Letter. In connection with the
credit facilities contemplated by the Commitment Letter (the "Facilities"),
United Rentals has agreed to pay GSCP certain commitment, underwriting,
administrative and termination fees, to reimburse GSCP for reasonable
out-of-pocket fees and expenses, whether or not the Facilities close, and
to provide certain indemnities, as is customary for commitments such as the
Facilities. In connection with the engagement of Goldman Sachs as financial
advisor, United Rentals anticipates that certain employees of Goldman Sachs
may communicate in person, by telephone or otherwise with a limited number
of institutions, brokers or other persons who are stockholders of Rental
Service for the purpose of soliciting proxies for the Special Meeting; all
of such employees of Goldman Sachs are listed on Schedule II hereto, and
none of such employees own any Shares or other securities of Rental
Service. Goldman Sachs will not receive any fee for or in connection with
such solicitation activities apart from the fees which it is otherwise
entitled to receive as described above. Goldman Sachs has rendered various
investment banking services and other advisory services to United Rentals
and its affiliates in the past and is expected to continue to render such
services, for which they have received and will continue to receive
customary compensation from United Rentals and its affiliates. In the
ordinary course of business, Goldman Sachs and its affiliates may actively
trade securities of Rental Service and United Rentals for their own account
or for the account of customers and, accordingly, may at any time hold a
long or short position in such securities. Goldman Sachs has advised United
Rentals that, as of the date of this Proxy Statement, Goldman Sachs does
not own any Shares for its own account. Goldman Sachs and certain of its
affiliates may have voting and dispositive power with respect to certain
Shares held in asset management, brokerage and other accounts. Goldman
Sachs and such affiliates disclaim beneficial ownership of such Shares.
CERTAIN INFORMATION ABOUT UNITED RENTALS
United Rentals is a Delaware corporation with its principal
executive offices located at Four Greenwich Office Park, Greenwich,
Connecticut 06830. The telephone number of United Rentals at
such location is (203) 622-3131.
United Rentals is the largest equipment rental company in North
America with 470 branch locations in 40 states, Canada and Mexico. United
Rentals offers to rent over 600 different types of equipment on a daily,
weekly or monthly basis and serves customers that includes construction
industry participants, industrial companies and homeowners. United Rentals
also sells used rental equipment, acts as a dealer for many types of new
equipment, and sells related merchandise and parts. In the past year,
United Rentals has served over 900,000 customers.
United Rentals has one of the most comprehensive and newest
customer rental fleets in the industry. The types of rental equipment that
United Rentals offers includes a broad range of light to heavy construction
and industrial equipment, such as backhoes, aerial lifts, skid-steer
loaders, forklifts, compressors, pumps and generators, as well as a variety
of smaller tools and equipment. United Rentals' equipment fleet has an
original purchase price of approximately $2.2 billion and a weighted
average age of approximately 26 months.
United Rentals began operations in October 1997 and has grown
through a combination of internal growth and the acquisition of 101
companies (through March 3, 1999). United Rentals' acquisitions include its
merger with U.S. Rentals Inc., a California corporation, in September 1998.
At the time of such merger, U.S. Rentals was the second largest equipment
rental company in the United States based on 1997 rental revenues.
United Rentals is subject to the informational filing requirements
of the Securities Exchange Act of 1934, as amended, and, in accordance
therewith, is obligated to file reports, proxy statements and other
information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning
United Rentals' directors and officers, their remuneration, options granted
to them, the principal holders of United Rentals' securities and any
material interests of such persons in transactions with United Rentals is
required to be disclosed in proxy statements distributed to United Rentals'
stockholders and filed with the Commission. Such reports, proxy statements
and other information should be available for inspection at the public
reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission
located at Seven World Trade Center, Suite 1300, New York, NY 10048 and 500
West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a
website at http://www.sec.gov that contains reports, proxy statements and
other information filed electronically by United Rentals. United Rentals'
common stock is listed on the NYSE, and reports, proxy statements and other
information concerning United Rentals should also be available at the
offices of the NYSE located at 20 Broad Street, New York, NY 10005.
FORWARD-LOOKING STATEMENTS
This Proxy Statement contains certain "forward-looking" statements
which United Rentals believes are within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act.
The safe harbors intended to be created thereby are not available to
statements made in connection with a tender offer and United Rentals is not
aware of any judicial determination as to the applicability of such safe
harbors to forward-looking statements made in solicitation materials when
there is a simultaneous tender offer. However, stockholders should be aware
that any such forward-looking statements are only predictions, subject to
risks and uncertainties that exist in the business environment which could
render actual outcomes and results materially different than predicted. In
some cases, such forward-looking statements may be identified by
terminology such as "may," "will," "could," "should," "expects," "intends"
or "believes" or the negative of such terms or other comparable
terminology.
OTHER INFORMATION
The information concerning Rental Service, NationsRent and the
Proposed NationsRent Merger contained herein has been taken from, or based
upon, publicly available documents on file with the Commission and other
publicly available information, and such information is incorporated by
reference herein and is qualified in its entirety thereby. United Rentals
does not take any responsibility for the accuracy or completeness of such
information or for any failure by Rental Service to disclose events that
may have occurred and may affect the significance or accuracy of any such
information. United Rentals has not to date had access to the books and
records of Rental Service.
The information contained in this Proxy Statement concerning the
United Rentals Offer is taken from, and qualified in its entirety by
reference to, the full text of the United Rentals Offer to Purchase and
the related Letter of Transmittal.
United Rentals is not aware of any other matter to be considered at
the Special Meeting. However, if any other matter properly comes before the
Special Meeting, United Rentals will vote all proxies held by it as United
Rentals, in its sole discretion, may determine.
According to Rental Service's Proxy Statement for its 1998 Annual
Meeting, stockholder proposals submitted for inclusion in the Rental
Service Proxy Statement for its 1999 Annual Meeting of Stockholders must
have been received by Rental Service not later than November 27, 1998.
United Rentals, Inc.
Dated: April [ ], 1999
If you have any questions or need assistance in voting your shares,
please call:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: 1-800-223-2064
SCHEDULE I
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT OF RENTAL SERVICE
According to Rental Service's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "Rental Service 10-K"), as of February
26, 1999, there were outstanding 24,123,392 Shares. Pursuant to the
NationsRent Option Agreement, Rental Service granted NationsRent an option
to purchase up to 4,795,431 Shares. The information concerning Rental
Service and the Proposed NationsRent Merger contained herein has been taken
from, or based upon, publicly available documents on file with the
Commission and other publicly available information. United Rentals does
not take any responsibility for the accuracy or completeness of such
information or for any failure by Rental Service to disclose events that
may have occurred and may affect the significance or accuracy of any such
information. United Rentals has not, to date, had access to the books and
records of Rental Service.
PRINCIPAL STOCKHOLDERS OF RENTAL SERVICE
The following table sets forth certain information, which is based
on the Rental Service 10-K, regarding the beneficial ownership of Rental
Service Common Stock outstanding as of February 28, 1999 by each person
beneficially owning 5% or more of any class of Rental Service's securities.
Except as otherwise indicated, according to the Rental Service 10-K each
stockholder listed below has informed Rental Service that such stockholder
has (i) sole voting and investment power with respect to its Shares, except
to the extent that authority is shared by spouses under applicable law, and
(ii) record and beneficial ownership with respect to its Shares.
<TABLE>
<CAPTION>
Beneficial Ownership
As of
Name of Beneficial Owner February 28, 1999 (1)
- --------------------------------------------------------------- -------------------------------
Shares Percent
-------------- ---------------
<S> <C> <C>
Capital Research and Management Company (2).................... 1,600,000 6.5%
Pilgrim Baxter & Associates, Ltd. (3).......................... 1,384,000 5.6
(1) A person is deemed as of any date to have "beneficial ownership" of
any security that person has a right to acquire within 60 days
after that date. Shares which each identified stockholder has the
right to acquire within 60 days of the date of the table set forth
above are deemed to be outstanding in calculating the percentage
ownership of that stockholder, but are not deemed to be outstanding
as to any other person.
(2) Based on a Schedule 13G for the year ended December 31, 1998, which
was filed on February 8, 1999. In that Schedule 13G, Capital
Research and Management Company ("Capital Research") reported that
it beneficially owned a total of 1,600,000 Shares. Of those Shares,
it had sole investment discretion with respect to all of the Shares
and had voting authority with respect to none of the Shares. The
address of Capital Research is 333 S. Hope Street, Los Angeles,
California 90071.
(3) Based on a Schedule 13G for the year ended December 31, 1998, which
was filed on February 5, 1999. In that Schedule 13G, Pilgrim Baxter
& Associates, Ltd. ("Pilgrim Baxter") reported that it beneficially
owned a total of 1,384,000 Shares. Of those Shares, it had sole
investment discretion with respect to all of the Shares and had
voting authority with respect to 965,800 of the Shares. The address
of Pilgrim Baxter is 825 Duportail Road, Wayne, Pennsylvania 19087.
</TABLE>
OWNERSHIP OF DIRECTORS AND MANAGEMENT OF RENTAL SERVICE
The following table sets forth certain information, which is based
on the Rental Service 10-K, regarding the beneficial ownership of Rental
Service Common Stock outstanding as of February 28, 1999 by (a) each of
Rental Service's directors and executive officers and (b) all of Rental
Service's directors and executive officers as a group. Except as otherwise
indicated, each stockholder listed below has informed Rental Service that
he has (i) sole voting and investment power with respect to such
stockholder's Shares, except to the extent that authority is shared by
spouses under applicable law, and (ii) record and beneficial ownership with
respect to such stockholder's Shares.
<TABLE>
<CAPTION>
Beneficial Ownership
As of
Name of Beneficial Owner February 28, 1999 (1)
- --------------------------------------------------------------- -------------------------------
Shares Percent
-------------- ---------------
<S> <C> <C>
Martin R. Reid (2) (3) (4)..................................... 538,545 2.2%
Robert M. Wilson (2) (4)....................................... 24,653 *
Ronald Halchishak (2) (4)...................................... 58,340 *
David G. Ledlow (2) (4)........................................ 49,761 *
Douglas A. Waugaman (2) (4).................................... 112,469 *
John Markle (2) (4)............................................ 62,906 *
Milfred E. Howard (2) (4)...................................... 7,616 *
David B. Harrington (2) (4).................................... 8,382 *
William M. Barnum, Jr. (2) (5)................................. 455,317 1.9
James R. Buch (2) (4).......................................... 6,525 *
David P. Lanoha (2) (6)........................................ 149,855 *
Christopher A. Laurence (2) (5)................................ 7,261 *
Eric L. Mattson (2) (7)........................................ 5,625 *
Britton H. Murdoch (2) (8)..................................... 7,625 *
John M. Sullivan (2) (4)....................................... 3,125 *
All directors and executive officers as a group (15 1,498,005 6.1
individuals)...................................................
- ------------
* Beneficial ownership does not exceed 1% of the outstanding Rental
Service Common Stock.
(1) A person is deemed as of any date to have "beneficial ownership" of
any security that person has a right to acquire within 60 days
after that date. Shares which each identified stockholder has the
right to acquire within 60 days of the date of the table set forth
above are deemed to be outstanding in calculating the percentage
ownership of that stockholder, but are not deemed to be outstanding
as to any other person.
(2) Excludes Shares issuable upon exercise of options that are not
exercisable within 60 days of the date of the table set forth
above, as follows: Mr. Reid--330,058 Shares; Mr. Wilson--118,250
Shares; Mr. Halchishak--70,750 Shares; Mr. Ledlow--70,750 Shares;
Mr. Waugaman--112,000 Shares; Mr. Markle--67,771 Shares; Mr.
Harrington--40,143 Shares; Mr. Howard--47,848 Shares; Mr.
Barnum--6,875 Shares; Mr. Buch--5,975 Shares; Mr. Lanoha--9,375
Shares; Mr. Laurence--6,875 Shares; Mr. Mattson--6,875 Shares; Mr.
Murdoch--6,875 Shares; and Mr. Sullivan--9,375 Shares.
(3) Includes Shares subject to vesting that would be repurchased by
Rental Service if they fail to vest.
(4) The address of this person is c/o Rental Service Corporation, 6929
E. Greenway Parkway, Suite 200, Scottsdale, Arizona 85254.
(5) Mr. Barnum, a director of Rental Service, is a general partner of
BBP, the general partner of Brentwood RSC Partners, which owns
417,972 Shares. Accordingly, Mr. Barnum may be deemed to be the
beneficial owner of the Shares owned by BBP and for purposes of
this table they are included. Mr. Barnum disclaims beneficial
ownership of these Shares. The address of Brentwood RSC Partners,
Mr. Barnum and Mr. Laurence is 11150 Santa Monica Boulevard, Suite
1200, Los Angeles, California 90025.
(6) The address of this person is c/o Rental Service Corporation, 11250
East 40th Avenue, Denver, Colorado 60239.
(7) The address of this person is c/o Baxter Hughes Incorporated, 3900
Essex Lane, Suite 1200, Houston, Texas 77027.
(8) The address of this person is c/o V-Span, 1100 First Avenue, Suite
400, King of Prussia, Pennsylvania 19406.
</TABLE>
SCHEDULE II
INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE OFFICERS AND OTHER
EMPLOYEES OF UNITED RENTALS AND OTHER REPRESENTATIVES OF UNITED
RENTALS
The following table sets forth the name and title of persons who
may be deemed to be participants on behalf of United Rentals in the
solicitation of proxies from the stockholders of Rental Service. Unless
otherwise indicated, the principal business address of each director,
executive officer, nominee, employee or representative is c/o United
Rentals, Inc., Four Greenwich Office Park, Greenwich, Connecticut 06830.
Directors and Executive Officers of United Rentals
Name Positions
- ----------- ---------------------
Bradley S. Jacobs.................... Chairman, Chief Executive Officer
and Director
Wayland R. Hicks..................... Vice Chairman, Chief Operating
Officer and Director
John N. Milne........................ Vice Chairman, Chief Acquisition
Officer, Secretary and Director
William F. Berry..................... President and Director
Michael J. Nolan..................... Chief Financial Officer
Robert P. Miner...................... Vice President, Strategic Planning
John S. McKinney..................... Vice President, Finance and Director
Leon D. Black........................ Director
Richard D. Colburn................... Director
Ronald M. DeFeo...................... Director
Michael S. Gross..................... Director
Richard J. Heckmann.................. Director
Gerald Tsai, Jr...................... Director
Christian M. Weyer................... Director
Directors and Executive Officers of UR Acquisition
Name Positions
- ----------- ---------------------
John N. Milne........................ President and Director
Michael J. Nolan..................... Vice President, Secretary and Director
Robert P. Miner...................... Vice President and Director
Wayland R. Hicks..................... Treasurer and Director
Certain Employees and Other Representatives of United Rentals
Who May Also Solicit Proxies
Name Positions
- ----------- ---------------------
Nominees (other than directors or
executive officers of United
Rentals):
Richard N. Daniel.................... Nominee
555 Madison Ave
17th Floor
New York, New York 10022
Stephanie R. Joseph.................. Nominee
The Directors' Network
14 East 60th Street
Suite 208
New York, New York 10022
Raymond S. Troubh.................... Nominee
10 Rockefeller Plaza
Suite 712
New York, New York 10020
Representatives of Goldman Sachs:
Bruce J. Evans....................... Vice President - Goldman Sachs
Robert D. Lipman..................... Vice President - Goldman Sachs
Jeffrey M. Moslow.................... Managing Director - Goldman Sachs
Cody J. Smith........................ Managing Director - Goldman Sachs
Goldman, Sachs & Co.'s principal business address is 85 Broad Street,
New York, NY 10004. Goldman Sachs engages in a full range of investment
banking, securities trading, market-making and brokerage services for
institutional and individual clients. In the normal course of business,
Goldman Sachs may trade the debt and equity securities of Rental Service
for its own account and the accounts of its customers, and, accordingly,
may at any time hold a long or short position in such securities. As of the
close of business on April [ ], 1999, Goldman Sachs and its affiliates
owned no shares of Rental Service Common Stock for their own account.
Shares held by Participants
United Rentals is the beneficial holder of 100 shares of Rental
Service common stock purchased on March 30, 1999 for $16 13/16 per share.
None of the participants listed in this Schedule II own any shares of
Rental Service common stock.
Certain Transactions
Pursuant to a Master Agreement, dated as of August 31, 1994, by and
between ACME Acquisition Corp., a California corporation and a predecessor
to Rental Service ("ACME"), and Wynne Systems, Inc., a California
corporation and a wholly owned indirect subsidiary of United Rentals
("Wynne"), Wynne has granted ACME a non-exclusive, non-transferable
perpetual license with respect to certain software and has agreed to
provide ACME with certain software installation and support services. In
accordance with the terms of such license, a license fee was paid upon
inception of such license and additional fees are payable based on certain
system upgrades and other factors.
Pursuant to an Asset Purchase Agreement, dated as of June 14, 1996,
U.S. Rentals, Inc., a California corporation ("U.S. Rentals") acquired
certain of the assets of ACME Rents, Inc. d/b/a Contractors Equipment
Rentals, Inc., a California corporation ("ACME Rents"). The purchase price
of the assets acquired was approximately $9 million. U.S. Rentals was
merged with a wholly owned subsidiary of United Rentals in September 1998,
and ACME Rents is a predecessor to Rental Service.
Certain related investment funds of Apollo Advisors, L.P. ("Apollo")
hold bank indebtedness of Rental Service, which Apollo has advised United
Rentals has a value of approximately $15 million. Two of United Rentals'
directors, Leon D. Black and Michael S. Gross, are principals of Apollo.
Apollo and Messrs. Black and Gross disclaim any beneficial ownership in
such indebtedness.
IMPORTANT
If your shares are held in your own name, please sign, date and return
the enclosed GOLD proxy card today. If your shares are held in
"Street-Name," only your broker or bank can vote your Shares and only upon
receipt of your specific instructions. Please return the enclosed GOLD
proxy card to your broker or bank and contact the person responsible for
your account to ensure that a GOLD proxy is voted on your behalf.
Do not sign any [white] proxy card you may receive from Rental
Service.
If you have any questions or need assistance in voting your shares,
please call:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 1005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: 1-800-223-2064
PRELIMINARY COPY - SUBJECT TO COMPLETION
[FORM OF PROXY CARD]
P
R THIS PROXY IS SOLICITED ON BEHALF OF UNITED RENTALS, INC.
O FOR THE SPECIAL MEETING OF STOCKHOLDERS
X OF RENTAL SERVICE CORPORATION
Y TO BE HELD ON ___________, 1999
The undersigned stockholder of Rental Service
Corporation ("Rental Service") hereby appoints
______________, __________________ and
__________________ and each or any of them,
attorneys and proxies of the undersigned, with
full power of substitution, to vote all of the
shares of common stock of Rental Service held
of record by the undersigned on ________, 1999,
at the Special Meeting of the Stockholders of
Rental Service to be held on ___________,
___________, 1999, at _______, local time, at
___________________________, and at any
adjournments, postponements, continuations or
reschedulings thereof (the "Special Meeting"),
with all the powers the undersigned would
possess if personally present at the Special
Meeting.
(Continued and to be signed on reverse side.)
In opposition to the solicitation by the Rental Service Board of Directors
-------------
SEE REVERSE
SIDE
-------------
(X) Please mark your
vote as this
example
<TABLE>
<CAPTION>
UNITED RENTALS RECOMMENDS THAT YOU VOTE
AGAINST ITEM 1 BELOW
<S> <C> <C> <C> <C>
(1) Proposal to approve and adopt the Agreement AGAINST FOR ABSTAIN This proxy when properly executed will
and Plan of Merger, dated as of voted in the manner directed herein by the
January 20, 1999, by and among undersigned stockholder and at the discretion of
Rental Service Corporation and NationsRent, the proxy holders as to any other business
Inc. (the "Merger Agreement"). that may properly come before the Special
Meeting. If you do not indicate how you
( ) ( ) ( ) want to vote, your proxy will be counted as a
vote against the Merger Agreement.
To consider and act upon any other business
which may be properly brought before the
Special Meeting.
PLEASE COMPLETE, EXECUTE AND RETURN THIS
PROXY PROMPTLY IN THE ENCLOSED,
POSTAGE-PREPAID, BUSINESS REPLY ENVELOPE. NO
ADDITIONAL POSTAGE IS NECESSARY IF SUCH
ENVELOPE IS MAILED IN THE UNITED STATES.
This proxy revokes all prior proxies given
by the undersigned with respect to the matters
covered hereby.
SIGNATURE___________________________________________DATED_____________, 1999
SIGNATURE (if held jointly)
____________________________________________________DATED_____________, 1999
Please sign your name exactly as it appears hereon. When signing as
attorney, executor, administrator, trustee or guardian please give your
full title. If a corporation, please sign in full corporate name by the
president or other authorized officer. If a partnership, please sign the
partnership name by authorized person(s).
</TABLE>
