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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 14)
RENTAL SERVICE CORPORATION
(Name of Subject Company)
RENTAL SERVICE CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
76009V102
(CUSIP Number of Class of Securities)
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Robert M. Wilson
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
Rental Service Corporation
6929 East Greenway Parkway, Suite 200
Scottsdale, Arizona 85254
(480) 905-3300
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
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Copies to:
Elizabeth A. Blendell, Esq. Mark D. Gerstein, Esq.
Latham & Watkins Latham & Watkins
633 West Fifth Street, Suite 4000 233 South Wacker Drive
Los Angeles, California 90071-2007 Sears Tower, Suite 5800
(213) 485-1234 Chicago, Illinois 60606-6401
(312) 876-7700
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Item 4. The Solicitation or Recommendation.
(a) On June 8, 1999, the Board of Directors (the "RSC Board") of Rental
Service Corporation ("RSC") met in Scottsdale, Arizona (the "June 8 Meeting")
to, among other things, receive and evaluate the joint presentation of Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Morgan Stanley
& Co. Incorporated ("Morgan Stanley"), financial advisors to RSC, with respect
to their ongoing review of strategic alternatives available to RSC.
At the June 8 Meeting, Merrill Lynch and Morgan Stanley jointly presented
to the RSC Board an analysis of RSC's strategic alternatives. During the
presentation, Merrill Lynch informed the RSC Board that it had not changed its
written opinion, dated April 16, 1999, as to the inadequacy, from a financial
point of view, of the consideration being offered by United Rentals, Inc.
("United Rentals") to RSC's stockholders (other than United Rentals and its
affiliates) in United Rentals' tender offer for RSC's common stock (the "Tender
Offer"). In light of the foregoing, the RSC Board confirmed its previous
determination that the Tender Offer is inadequate and not in the best interests
of RSC or its stockholders. The RSC Board also determined to continue to
recommend that RSC's stockholders reject the Tender Offer and not tender their
shares of RSC's common stock pursuant to the Tender Offer and to continue to
urge RSC's stockholders not to deliver consents to United Rentals with respect
to its solicitation of consents to remove and replace the members of the RSC
Board.
Following the joint presentation of Merrill Lynch and Morgan Stanley, the
RSC Board discussed the matters presented and determined to further explore the
strategic alternatives available to RSC.
The process of exploring RSC's strategic alternatives could result in RSC
requesting and receiving formal proposals from one or more third parties to
engage in a strategic transaction with RSC; could result in an agreement for a
strategic transaction between RSC and a third party; could result in an auction
of RSC involving multiple parties that have communicated expressions of interest
in RSC; could result in a recapitalization or an investment in RSC by a third
party; or could result in RSC remaining an independent public company. No
assurance can be given as to the outcome of the pursuit of any of these
alternatives or that any discussions or negotiations with one or more third
parties which may be entered into will result in a request for or submission of
any proposal or will result in an auction of RSC or that any such proposal, if
made, by one or more third parties will result in an agreement to engage in a
strategic transaction with RSC.
As part of the RSC Board's determination, the RSC Board also authorized its
financial and legal advisors to provide forms of confidentiality/standstill
agreements to third parties, including United Rentals, interested in obtaining
access to RSC's senior management and reviewing confidential business and
financial information of RSC.
Following these discussions and at the request of the RSC Board, counsel to
the RSC Board then reviewed with the RSC Board certain matters related to the
Rights Agreement, dated as of April 16, 1999 (the "Rights Agreement"), between
RSC and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Rights
Agent"). After discussing these matters, the RSC Board adopted an amendment to
the Rights Agreement to (1) provide for the expiration of the Rights Agreement
on December 9, 1999, rather than April 16, 2009, and (2) in light of the
termination of the Agreement and Plan of Merger, dated as of January 20, 1999
(the "NationsRent Merger Agreement"), between RSC and NationsRent, Inc.
("NationsRent"), delete all references to NationsRent, the NationsRent Merger
Agreement and certain other documents executed by RSC and NationsRent in
connection therewith, including, among others, the deletion of a reference to
the expiration of the Rights Agreement 60 days following the termination of the
NationsRent Merger Agreement.
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At the June 8 Meeting, the RSC Board also discussed setting a date for the
1999 annual meeting of RSC's stockholders (the "1999 Annual Meeting"). After
considering the matter, the RSC Board determined to set August 27, 1999 as the
date for the 1999 Annual Meeting. In connection therewith, the RSC Board also
fixed the record date for stockholders entitled to vote at the 1999 Annual
Meeting as the close of business on July 7, 1999.
A copy of the press release issued by RSC relating to certain of the
foregoing matters is filed as Exhibit 59 hereto and is incorporated by reference
herein.
Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) As described in the response to Item 4(a) above, based upon its
evaluation of the joint presentation of Merrill Lynch and Morgan Stanley at the
June 8 Meeting, the RSC Board determined to further explore the strategic
alternatives available to RSC. As part of this determination, the RSC Board
authorized its financial and legal advisors to provide forms of
confidentiality/standstill agreements to third parties, including United
Rentals, interested in obtaining access to RSC's senior management and reviewing
confidential business and financial information of RSC.
On June 9, 1999, representatives of Merrill Lynch and Morgan Stanley
contacted Goldman, Sachs & Co. ("Goldman, Sachs"), financial advisor to United
Rentals, to advise Goldman, Sachs that RSC would provide a form confidentiality/
standstill agreement to Goldman, Sachs, on behalf of United Rentals, pursuant to
the RSC Board's determination at the June 8 Meeting.
The process of exploring RSC's strategic alternatives could result in RSC
requesting and receiving formal proposals from one or more third parties to
engage in a strategic transaction with RSC; could result in an agreement for a
strategic transaction between RSC and a third party; could result in an auction
of RSC involving multiple parties that have communicated expressions of interest
in RSC; could result in a recapitalization or an investment in RSC by a third
party; or could result in RSC remaining an independent public company. No
assurance can be given as to the outcome of the pursuit of any of these
alternatives or that any discussions or negotiations with one or more third
parties which may be entered into will result in a request for or submission of
any proposal or will result in an auction of RSC or that any such proposal, if
made, by one or more third parties will result in an agreement to engage in a
strategic transaction with RSC.
In connection with the foregoing, the RSC Board has determined and affirmed
that disclosure of the possible terms of any transactions or proposals which may
result from the process prior to an agreement in principle with respect thereto
would jeopardize the initiation or continuation of negotiations with respect to
such transactions or proposals and, accordingly, has instructed RSC's management
not to disclose such possible terms, or the parties thereto, until such
agreement has been reached or as may otherwise be required by law.
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Item 8. Additional Information to be Furnished.
Amendment to Rights Agreement
Pursuant to authority granted by the RSC Board at the June 8 Meeting, on
June 9, 1999, RSC and the Rights Agent entered into an amendment to the Rights
Agreement (the "Rights Agreement Amendment").
The Rights Agreement Amendment amends the Rights Agreement (including the
exhibits thereto) to provide that the Rights Agreement will expire on the
earlier of (1) the close of business on December 9, 1999, (2) the time at which
the rights thereunder (the "Rights") are redeemed pursuant to the Rights
Agreement, (3) the closing of any merger or other acquisition transaction
involving RSC pursuant to a merger or other acquisition agreement between RSC
and any person which has been approved by the RSC Board prior to such person
becoming an Acquiring Person (as defined in the Rights Agreement), at which time
the Rights are deemed terminated, and (4) the time at which the Rights are
exchanged pursuant to the Rights Agreement. In addition, in light of the
termination of the NationsRent Merger Agreement, the Rights Agreement Amendment
further amends the Rights Agreement to delete all references therein to
NationsRent, the NationsRent Merger Agreement and certain other documents
executed by RSC and NationsRent in connection therewith, including, among
others, a reference to the expiration of the Rights Agreement 60 days following
termination of the NationsRent Merger Agreement.
A copy of the Rights Agreement Amendment is filed as Exhibit 60 hereto and
is incorporated by reference herein.
1999 Annual Meeting of Stockholders
As described in the response to Item 4(a) above, at the June 8 Meeting the
RSC Board set August 27, 1999 as the date for the 1999 Annual Meeting. In
connection therewith, the RSC Board also fixed the record date for determining
stockholders entitled to vote at the 1999 Annual Meeting as the close of
business on July 7, 1999.
Executive Committee
At the June 8 Meeting, the RSC Board appointed Eric L. Mattson to the
Executive Committee of the RSC Board (the "Executive Committee") as an
uncompensated member of the Executive Committee. In addition, Britton H.
Murdoch, a member of the Executive Committee, informed the RSC Board at the June
8 Meeting that he was relinquishing any right to compensation previously
authorized by the RSC Board in respect of his services as a member of the
Executive Committee, from and after June 8, 1999.
Item 9. Materials to be Furnished as Exhibits.
59 Press Release issued by Rental Service Corporation dated June 9, 1999.
60 Amendment to Rights Agreement, dated as of June 9, 1999, between Rental
Service Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 9, 1999 Rental Service Corporation
By: /s/ Robert M. Wilson
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Name: Robert M. Wilson
Title: Executive Vice President, Chief
Financial Officer, Secretary
and Treasurer
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EXHIBIT 59
FOR IMMEDIATE RELEASE
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RENTAL SERVICE CORPORATION BOARD
CONFIRMS INADEQUACY OF UNITED RENTALS OFFER;
WILL FURTHER EXPLORE STRATEGIC ALTERNATIVES
SCOTTSDALE, AZ -- June 9, 1999 -- Rental Service Corporation (NYSE: RSV) ("RSC")
announced today that its Board of Directors, after receiving and evaluating a
joint presentation from its financial advisors, Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley & Co. Incorporated, confirmed its previous
determination that the pending tender offer from United Rentals at $22.75 per
share is inadequate and not in the best interests of RSC or its stockholders.
The Board continues to urge RSC's stockholders to reject United Rentals' tender
offer and not to deliver consents to United Rentals with respect to its
solicitation of consents to remove and replace RSC's directors.
The Board also determined that RSC's senior management and its legal and
financial advisors should further explore the Company's strategic alternatives.
The Board authorized its financial and legal advisors to provide confidential
business and financial information and access to RSC's senior management to
third parties who enter into appropriate confidentiality/standstill agreements.
In addition, the Board set August 27, 1999 as the date for the Company's annual
stockholder meeting. Stockholders of record as of July 7, 1999 will be entitled
to vote at the meeting.
Rental Service Corporation is a leader in the rapidly growing equipment rental
industry, serving the needs of a wide variety of industrial, manufacturing and
construction markets. Headquartered in Scottsdale, Arizona, RSC operates 255
locations throughout the United States and Canada.
Contact Information
Rental Service Corporation Kekst and Company
Robert M. Wilson, 480/905-3300 Thomas Davies or David Kronfeld, 212/521-4800
# # #
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EXHIBIT 60
AMENDMENT TO RIGHTS AGREEMENT
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AMENDMENT, dated as of June 9, 1999 (this "Amendment"), to the Rights
Agreement, dated as of April 16, 1999 (the "Rights Agreement"), between RENTAL
SERVICE CORPORATION, a Delaware corporation (the "Company"), and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C. (the "Rights Agent").
The Company and the Rights Agent have heretofore executed and entered
into the Rights Agreement. Pursuant to Section 26 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with the provisions of Section 26 thereof. All
acts and things necessary to make this Amendment a valid agreement according to
its terms have been done and performed, and the execution and delivery of this
Agreement by the Company and the Rights Agent have been in all respects
authorized by the Company and the Rights Agent.
In consideration of the foregoing premises and mutual agreements set
forth in the Rights Agreement and this Amendment, the parties hereto agree as
follows:
1. The first recital to the Rights Agreement is hereby deleted in its
entirety.
2. The second sentence of Section 1.1 of the Rights Agreement is
hereby amended and restated in its entirety to read as follows:
"Notwithstanding the foregoing, no Person who is or shall become the
Beneficial Owner of 10% or more of the Common Shares of the Company
then outstanding shall be an "Acquiring Person" solely as the result
of an acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 10% or more of the
Common Shares of the Company then outstanding."
3. Section 1.8 of the Rights Agreement is hereby amended and restated
in its entirety to read as follows:
"Intentionally omitted."
4. Section 7.1 of the Rights Agreement is hereby amended and restated
in its entirety to read as follows:
"Subject to Section 11.1.2 and except as otherwise provided herein,
the registered holder of any Right Certificate may exercise the Rights
evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the
aggregate Purchase Price for the total number of one one-thousandths
of a Preferred Share (or other securities, cash or other assets) as to
which the Rights are exercised, at or
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prior to the time (the "Expiration Date") that is the earliest of (i)
the Close of Business on December 9, 1999 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 (the "Redemption Date"), (iii) the closing of any merger or
other acquisition transaction involving the Company pursuant to an
agreement of the type described in Sections 1.3(ii)(A)(z) and 13.3, at
which time the Rights are deemed terminated and (iv) the time at which
the Rights are exchanged as provided in Section 27."
5. The legend at the top of the Form of Right Certificate attached as
Exhibit B to the Rights Agreement is hereby amended and restated in its entirety
to read as follows:
"NOT EXERCISABLE AFTER DECEMBER 9, 1999 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN OR THE CLOSING OF ANY MERGER OR OTHER
ACQUISITION TRANSACTION INVOLVING THE COMPANY PURSUANT TO AN AGREEMENT
OF THE TYPE DESCRIBED IN SECTIONS 1.3(ii)(A)(z) AND 13.3 OF THE
AGREEMENT HAS OCCURRED. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN
ACQUIRING PERSON (AS DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE."
6. The first sentence of the first paragraph of the text of the Form
of Right Certificate attached as Exhibit B to the Rights Agreement is hereby
amended and restated in its entirety to read as follows:
"This certifies that ________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of April 16, 1999 (as
the same may be amended from time to time, the "Agreement"), between
Rental Service Corporation, a Delaware corporation (the "Company"),
and ChaseMellon Shareholder Services, L.L.C., a New Jersey limited
liability company, as Rights Agent (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date and prior to
5:00 P.M. (New York City time) on December 9, 1999, at the offices of
the Rights Agent, or its successors as Rights Agent, designated for
such purpose, one one-thousandth of a fully paid, nonassessable share
of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company, at a purchase price of
$150.00 per one one-thousandth of a Preferred Share, subject to
adjustment (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase and
certification duly executed."
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7. The second sentence of the second paragraph of the Summary of
Rights to Purchase Preferred Shares attached as Exhibit C to the Rights
Agreement is hereby amended and restated in its entirety to read as follows:
"Notwithstanding the foregoing, no Person who is or shall become the
Beneficial Owner of 10% or more of the Common Shares of the Company
then outstanding shall be an "Acquiring Person" solely as the result
of an acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 10% or more of the
Common Shares of the Company then outstanding."
8. The fourth paragraph of the Summary of Rights to Purchase
Preferred Shares attached as Exhibit C to the Rights Agreement is hereby amended
and restated in its entirety to read as follows:
"The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 9, 1999, subject to the Company's right
to extend such date (the "Final Expiration Date"), unless earlier
redeemed or exchanged by the Company or terminated. The Rights will
be deemed terminated, among other things, upon the closing of any
merger or other acquisition transaction involving the Company pursuant
to certain types of agreements, unless extended."
9. Except as expressly amended hereby, the Rights Agreement remains
in full force and effect in accordance with its terms.
10. The Rights Agreement, as amended by this Amendment, and each
Right Certificate issued under the Rights Agreement shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State;
except that all provisions regarding the rights, duties and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such State.
11. This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed an original, and all
such counterparts shall together constitute but one and the same instrument.
12. Except as expressly set forth herein, this Amendment shall not by
implication or otherwise alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Rights
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.
RENTAL SERVICE CORPORATION
By: /s/ Robert M. Wilson
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Name: Robert M. Wilson
Title: Executive Vice President, Chief
Financial Officer, Secretary and Treasurer
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Michael E. Dzieciolowski
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Name: Michael E. Dzieciolowski
Title: Assistant Vice President
