REVISED 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:
REVISED PRELIMINARY COPY - SUBJECT TO COMPLETION
[United Rentals Logo]
May [ ], 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 The United Rentals offer provides a significant premium and
more certain value for your Rental Service 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 May 13, 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 NOR A SOLICITATION OF CONSENTS FROM HOLDERS OF RENTAL SERVICE
COMMON STOCK. THE UNITED RENTALS TENDER OFFER IS BEING MADE ONLY BY MEANS
OF AN OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL, AND THE UNITED
RENTALS CONSENT SOLICITATION IS BEING MADE ONLY BY MEANS OF A CONSENT
STATEMENT AND RELATED CONSENT CARD, ALL OF WHICH HAVE BEEN SEPARATELY
MAILED TO RENTAL SERVICE STOCKHOLDERS.
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REVISED 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 May 13, 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 ______, 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
has sought 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 (the "Minimum
Condition"), (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 reasonable judgment, 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 reasonable judgment, that the
provisions of Section 203 of the DGCL are inapplicable to the United
Rentals Offer and the Proposed United Rentals Merger (the "Section 203
Condition"), (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 (the "Defensive Action Condition"), (6) any
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), having expired or
been terminated prior to the expiration of the United Rentals Offer, (the
"HSR Condition") (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. On April 20, 1999, the
waiting period under the HSR Act expired, satisfying the HSR Condition.
All conditions to the Offer must be satisfied or waived prior to
the expiration of the Offer.
On April 16, 1999, Rental Service adopted a Stockholder Rights
Plan. In connection with the Rights Agreement, dated as of April 16, 1999,
between Rental Service and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agreement"), the Rental Service Board declared a
dividend of one preferred share purchase right (the "Rights") for each
Share outstanding at the close of business on April 30, 1999. The Rights
Agreement, if not invalidated or otherwise made inapplicable to United
Rentals, UR Acquisition, the Offer and the Proposed United Rentals Merger,
will make the acquisition of Shares pursuant to the Offer and the Proposed
United Rentals Merger impracticable. Satisfaction of condition (5) set
forth in the second preceding paragraph would require the Rental Service
Board to redeem the Rights, amend the Rights Agreement or otherwise make
the Rights Agreement inapplicable to the United Rentals, UR Acquisition,
the Offer and the Proposed United Rentals Merger.
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. See "CERTAIN LITIGATION." While United Rentals
believes its claims in the Delaware Litigation are meritorious, there can
be no assurance that it will prevail in such litigation. Rental Service
stockholders should be aware that, unless United Rentals is successful in
the Delaware Litigation, under the terms of the NationsRent Merger
Agreement, the failure by the holders of a majority of the Shares to vote
in favor of the Proposed NationsRent Merger will (i) require the payment by
Rental Service to NationsRent of the NationsRent Termination Fee, and (ii)
trigger the exercisability of the NationsRent Option.
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 or waived, 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 because United Rentals will not proceed with the Offer if
the Proposed NationsRent Merger is approved by Rental Service stockholders.
However, even if the Proposed NationsRent Merger is not approved by Rental
Service stockholders, Rental Service stockholders could still be without a
viable alternative for an acquisition of Rental Service because the Offer
is subject to the conditions set forth above and in the Offer to Purchase.
Certain Information Concerning the Proposed NationsRent Merger
The NationsRent Merger Agreement provides that in the Proposed
NationsRent Merger, each outstanding share of 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 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) 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.
Rental Service stockholders should be aware that, unless United
Rentals is successful in the Delaware Litigation, under the terms of the
NationsRent Merger Agreement, the failure by the holders of a majority of
the Shares to vote in favor of the Proposed NationsRent Merger will (i)
require the payment by Rental Service to NationsRent of the NationsRent
Termination Fee, and (ii) trigger the exercisability of the NationsRent
Option.
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 NOR A SOLICITATION OF CONSENTS FROM
HOLDERS OF SHARES. UNITED RENTALS' OFFER WITH RESPECT TO THE SHARES IS MADE
ONLY THROUGH THE UNITED RENTALS OFFER TO PURCHASE AND RELATED LETTER OF
TRANSMITTAL, AND UNITED RENTALS' CONSENT SOLICITATION IS MADE ONLY THROUGH
THE UNITED RENTALS CONSENT STATEMENT AND RELATED CONSENT CARD, ALL OF WHICH
HAVE BEEN SEPARATELY MAILED TO RENTAL SERVICE STOCKHOLDERS.
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 16, 1999, Rental Service announced that its Board of
Directors had determined that the Offer is inadequate and not in the best
interests of Rental Service or its stockholders, and therefore recommended
that Rental Service's stockholders reject the Offer and not tender their
Shares to United Rentals. Rental Service also announced that Mr. Reid, its
Chairman and Chief Executive Officer, had been granted a medical leave of
absence due to a heart condition.
On April 16, 1999, the Rental Service Board also declared a
dividend of one Preferred Share Purchase Right on each outstanding share of
Rental Service Corporation common stock to holders of record on April 30,
1999. The Rights Agreement, if not invalidated or otherwise made
inapplicable to United Rentals, UR Acquisition, the Offer and the Proposed
United Rentals Merger, will make the acquisition of Shares pursuant to the
Offer and the Proposed United Rentals Merger impracticable. United Rentals
is conducting a separate solicitation of written consents from Rental
Service stockholders to, among other things, remove the existing Rental
Service Board of Directors and replace them with nominees of United
Rentals, who, subject to their fiduciary duties under applicable law,
intend to approve the Offer and Proposed United Rentals Merger and to take
certain other actions to facilitate the consummation of the Offer. In
connection with the foregoing, United Rentals' nominees, if elected, intend
to redeem the Rights, amend the Rights Agreement or otherwise make the
Rights Agreement inapplicable to United Rentals, UR Acquisition, the Offer
and the Proposed United Rentals Merger.
Set forth below under the caption "CERTAIN LITIGATION" is a summary
of the litigation between United Rentals and Rental Service and NationsRent
in connection with, among other things, the Offer.
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 had declined from $23.25 per Share to $17.25 per
Share, or 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. Finally, James L.
Kirk, Chairman and Chief Executive Officer of Rental Service would be Chief
Executive Officer of the surviving corporation.
NationsRent and Rental Service assert that they have structured the
Proposed NationsRent Merger as a "merger of equals". United Rentals
believes that the Proposed NationsRent Merger constitutes a "change in
control" of Rental Service, and, under applicable Delaware law (including
the "Revlon" case and its progeny), a board of directors of a company
undergoing a "change in control" has a duty to seek the highest reasonably
obtainable value for such company's stockholders. United Rentals' belief is
based in part on the facts set forth in the preceding paragraph and that
approximately 26% of the surviving company's shares will be held by the
current management of NationsRent and by H. Wayne Huizenga and his
affiliates. Mr. Huizenga and his affiliates are NationsRent's largest
stockholder group with ownership of approximately 24.4% of the
NationsRent's common stock, and Mr. Huizenga and his affiliates would be
the largest stockholder group of the surviving company. United Rentals'
belief is also based on the fact that, as described above, NationsRent will
have the right to designate a majority of the surviving company's board
and, accordingly, its CEO and other officers. Therefore, while Rental
Service stockholders would retain approximately 55% of the equity in a
surviving Rental Service/NationsRent, by approving the NationsRent Merger
you may be losing control of your company without any assurance of
receiving the highest reasonably obtainable value for your Shares. United
Rentals has alleged in the Delaware Litigation that the Proposed
NationsRent Merger constitutes a "change in control".
|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 or waived, 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 because United Rentals will not
proceed with the Offer if the Proposed NationsRent Merger is approved by
Rental Service stockholders. However, even if the Proposed NationsRent
Merger is not approved by Rental Service stockholders, Rental Service
stockholders could still be without a viable alternative for an acquisition
of Rental Service because the Offer is subject to the conditions set forth
above under the caption "Conditions to the United Rentals Offer," as well
as the other conditions set forth in the Offer to Purchase.
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. 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.
The Rental Service Board of Directors Adopted a Stockholder Rights
Plan. On April 16, 1999, in response to the Offer by United Rentals, the
Rental Service Board adopted a Stockholder Rights Plan (a so-called "poison
pill"). The Stockholder Rights Plan, if not invalidated or otherwise made
inapplicable to United Rentals, UR Acquisition, the Offer and the Proposed
United Rentals Merger, will make the acquisition of Shares pursuant to the
Offer and the Proposed United Rentals Merger impracticable. However,
pursuant to the Stockholder Rights Plan, Rental Service has agreed (without
stockholder approval) that the Rights Agreement is not applicable to the
Proposed NationsRent Merger. By adopting this "poison pill," the Rental
Service Board created a significant obstacle to your receiving a greater
and more certain value for your Shares from United Rentals or otherwise.
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 the Rental Service Board 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 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 Offer and the Proposed United
Rentals Merger for purposes of Section 203 of the DGCL. United Rentals
believes that the Rental Service Board has violated its fiduciary duty to
act to maximize the value obtained for all Rental Service stockholders by
agreeing to the NationsRent Option and the NationsRent Termination Fee
which are designed to inhibit, among other things, a superior offer for
Rental Service from United Rentals or anyone else. 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 (the "Connecticut Litigation"). United
Rentals believes that certain statements made by officers of both Rental
Service and NationsRent following the announcement of the Offer by United
Rentals were in violation of the federal proxy and tender offer rules.
On April 16, 1999, Rental Service (i) answered the complaint filed
by United Rentals with respect to the Connecticut Litigation, and (ii)
filed a counterclaim (collectively with the answer described in the
previous clause (i), the "Counterclaim") against United Rentals seeking
declaratory and injunctive relief. The Counterclaim alleges, among other
things, that United Rentals violated Sections 14(d) and 14(e) of the
Exchange Act, by allegedly misstating, concealing and failing to adequately
disclose certain material terms of the Offer relating to the financing
thereof. In the Counterclaim, Rental Service claimed that United Rentals
and its representatives have stated that the Offer is "fully financed" and
provides "certainty" while allegedly failing to state that the Offer is
subject to what Rental Service claims is a financing condition. The
Counterclaim further alleges that United Rentals' alleged effort to conceal
the "financing condition" and "financing uncertainty" deprives Rental
Service's stockholders of the protections of Section 14(e) of the Exchange
Act and, among other things, seeks to enjoin the Offer and compel United
Rentals to make corrective disclosures. On April 20, 1999, Rental Service
filed a motion for a preliminary injunction in the Connecticut Litigation
to prevent United Rentals from proceeding with the Offer (the "Preliminary
Injunction") on the basis of the allegations set forth in the Counterclaim
as described above.
On April 20, 1999, United Rentals filed a motion to dismiss the
Counterclaim and a supporting memorandum of law (collectively, the "Motion
to Dismiss") with respect to the Connecticut Litigation. In the Motion to
Dismiss, United Rentals argues that the Court should dismiss the
Counterclaim because United Rentals has received a commitment letter (the
"Commitment Letter") from Goldman Sachs Credit Partners L.P., a copy of
which has been filed as an exhibit to the Schedule 14D-1, and, as such,
United Rentals considers the Offer to be "fully financed". As disclosed in
the Offer to Purchase, the Offer is subject to United Rentals receiving the
funds contemplated by the Commitment Letter; however, the Offer is not
subject to United Rentals seeking any other commitment for, or sources of,
any financing necessary to consummate the Offer and the Proposed Merger.
While Rental Service alleges that United Rentals failed to prominently
state that the Offer is subject to a financing condition, the
"Introduction" to the Offer to Purchase states that the Offer is
conditioned on "receipt of the financing pursuant to the Commitment Letter"
and the customary conditions to the Commitment Letter are summarized in
"Section 10--Source and Amount of Funds" of the Offer to Purchase. As a
result of the foregoing, United Rentals believes (i) its Motion to Dismiss
should be granted and (ii) the Counterclaim and the Preliminary Injunction
are without merit, and United Rentals intends to vigorously defend itself
against these actions.
On April 22, 1999, Rental Service filed an amended counterclaim
(the "Amended Counterclaim") in the United States District Court for the
District of Connecticut alleging violations of the Clayton Act and seeking,
by way of a preliminary injunction, to enjoin United Rentals from
attempting to elect six United Rentals officers and/or directors originally
nominated by United Rentals to the Rental Service Board. The Amended
Counterclaim alleges that if United Rentals succeeded in electing such
officers and directors to the Rental Service Board, interlocking
directorships would exist among competing corporations in violation of the
Clayton Act. United Rentals believes the Amended Counterclaim and motion
for preliminary injunction are without merit and intends to vigorously
defend against such motion. However, United Rentals believes that it is in
the best interests of Rental Service stockholders that United Rentals be
able to move forward expeditiously with its solicitation of consents and
afford Rental Service stockholders the opportunity to act on the proposals
set forth in United Rentals' consent solicitation statement. Accordingly,
in order to avoid delay in the consent solicitation as a result of the
allegations presented in the Amended Counterclaim, each nominee originally
designated by United Rentals who is an officer and/or a director of United
Rentals has withdrawn as a nominee, and a total of nine persons who are not
directors or officers of United Rentals or its affiliates have been
designated by United Rentals as nominees to the Rental Service Board.
On April 30, 1999, NationsRent filed a complaint against United
Rentals, UR Acquisition, Bradley S. Jacobs, John N. Milne and Goldman,
Sachs & Co. in the Circuit Court of the 17th Judicial Circuit in and for
Broward County, Florida (the "Florida Litigation") seeking injunctive and
other relief against United Rentals and to enjoin United Rentals from,
among other things, allegedly tortiously interfering with the NationsRent
Merger Agreement. NationsRent also seeks an unspecified amount of money
damages and punitive damages. United Rentals believes the Florida Litigation
is without merit, and intends to vigorously defend against this action.
VOTING INFORMATION
According to Rental Service's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "Rental Service Form 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. While United Rentals expects that any such fee would be
commensurate with transactions of this nature and size, no fee has yet been
agreed upon and the determination of such fee will be based upon arm's
length negotiations between United Rentals and Goldman Sachs. Accordingly,
the amount of the fee, if any, which would be payable to Goldman Sachs in
the event that United Rentals acquired less than 50% of the Shares or
Rental Service's assets (based upon the book value thereof) is not
presently capable of being predicted. However, United Rentals does not
expect that a fee based on the acquisition of less than 50% of the Shares
would ever need to be negotiated with Goldman Sachs because (i) United
Rentals believes that it is unlikely that it would waive the Minimum
Condition (which requires that more than 50% of the Shares be tendered),
(ii) United Rentals does not intend to waive the Section 203 Condition, and
(iii) United Rentals does not intend to waive the Defensive Action
Condition (which is presently not satisfied due to Rental Service's
implementation of its Stockholder Rights Plan). 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 482 branch locations in 41 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 believes that it 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 25 months.
United Rentals began operations in October 1997 and has grown
through a combination of internal growth and the acquisition of 117
companies (through April 27, 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 (the "Act"), 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 proxy
solicitation materials when there is a simultaneous tender offer. However,
the proxy solicitation is intended to facilitate the Offer and the
statements made herein may be deemed to have been made in connection with a
tender offer. Accordingly, such statements may not be covered by the safe
harbor provisions of the Act. Stockholders should be aware that any
forward-looking statements made herein 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: May [ ], 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 the Rental Service Form 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.
The following table sets forth certain information, which is based
on the preliminary consent revocation statement (the "Consent Revocation
Statement") filed with the Commission on April 19, 1999 by Rental Service,
regarding the beneficial ownership of Shares outstanding as of March 31,
1999 by (1) any person known to Rental Service to beneficially own 5% or
more of any class of voting securities of Rental Service; (2) each director
and executive officer of Rental Service; and (3) all directors and
executive officers of Rental Service as a group. Except as otherwise
indicated, each stockholder listed below has informed Rental Service that
such stockholder has (A) sole voting and investment power with respect to
such Shares, except to the extent that authority is shared by spouses under
applicable law, and (B) record and beneficial ownership with respect to
such Shares.
<TABLE>
<CAPTION>
Beneficial Ownership
Name of Beneficial Owner As of March 31, 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
Martin R. Reid (4) (5) (6)....................................... 538,545 2.2
Douglas A. Waugaman (4) (6)...................................... 112,469 *
Robert M. Wilson (4) (6)......................................... 24,653 *
Ronald Halchishak (4) (6)........................................ 53,340 *
David G. Ledlow (4) (6).......................................... 49,761 *
John Markle (4) (6).............................................. 62,906 *
Milfred E. Howard (4) (6)........................................ 7,616 *
David B. Harrington (4) (6)...................................... 8,382 *
William M. Barnum, Jr. (4) (7)................................... 455,317 1.8
James R. Buch (4) (6)............................................ 6,525 *
David P. Lanoha (4) (8).......................................... 149,855 *
Christopher A. Laurence (4) (7).................................. 7,261 *
Eric L. Mattson (4) (9).......................................... 5,625 *
Britton H. Murdoch (4) (10)...................................... 7,625 *
John M. Sullivan (4) (6)......................................... 3,125 *
All directors and executive officers as a group (15 individuals). 1,493,005 6.0%
- ------------------
* Beneficial ownership does not exceed 1% of the outstanding Shares.
(1) A person is deemed as of any date to have "beneficial ownership" of
any security that such person has a right to acquire within 60 days
after such date. Shares that 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 such 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 and
filed on February 8, 1999. In that Schedule 13G, Capital Research
and Management Company 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 and Management Company is 333 S. Hope Street, Los
Angeles, California 90071.
(3) Based on a Schedule 13G for the year ended December 31, 1998 and
filed on February 5, 1999. In that Schedule 13G, Pilgrim Baxter &
Associates, Ltd. 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 & Associates, ltd. is 825 Duportail Road, Wayne,
Pennsylvania 19087.
(4) 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. Waugaman-112,000
Shares; Mr. Wilson-118,250 Shares; Mr. Halchishak-70,750 Shares;
Mr. Ledlow-70,750 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.
(5) Includes Shares subject to vesting that may be repurchased by
Rental Service if they fail to vest.
(6) The address of this person is c/o Rental Service Corporation, 6929
E. Greenway Parkway, Suite 200, Scottsdale, Arizona 85254.
(7) Mr. Barnum, a director of Rental Service, is a general partner of
BBP, the general partner of Brentwood RSC Partners, L.P., 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 such Shares. The address of Brentwood RSC Partners,
L.P., Mr. Barnum and Mr. Laurence is 11150 Santa Monica Boulevard,
Suite 1200, Los Angeles, California 90025.
(8) The address of this person is c/o Rental Service Corporation, 11250
East 40th Avenue, Denver, Colorado 60239.
(9) The address of this person is c/o Baker Hughes Incorporated, 3900
Essex Lane, Suite 1200, Houston, Texas 77027.
(10) 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 AND EXECUTIVE OFFICERS
OF UNITED RENTALS AND UR ACQUISITION AND OTHER PERSONS WHO MAY
SOLICIT PROXIES
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, 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
Other Persons Who May Also Solicit Proxies
Name Positions
- ----------- ----------------------
Nominees to the Rental Service Board
under United Rentals' Consent
Solicitation:
William E. Aaron..................... Nominee
Executive Monetary Management, Inc.
919 Third Avenue
New York, New York 10022
David A. Bronner..................... Nominee
Katten Muchin & Zavis
525 West Monroe Street
Chicago, Illinois 60661
Richard N. Daniel.................... Nominee
555 Madison Ave
New York, New York 10022
Peter Gold........................... Nominee
280 North Central Avenue
Hartsdale, New York 10530
Stephanie R. Joseph.................. Nominee
The Directors' Network Inc.
14 East 60th Street
New York, New York 10022
David C. Katz........................ Nominee
54 Tarn Drive
Morris Plains, New Jersey 07950
Elliot H. Levine .................... Nominee
Levine & Seltzer LLP
150 East 52nd Street
New York, New York 10022
Jeffrey M. Parker.................... Nominee
Genesis Capital, Inc.
230 Park Avenue
New York, New York 10169
Raymond S. Troubh.................... Nominee
10 Rockefeller Plaza
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 May [ ], 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
REVISED PRELIMINARY COPY - SUBJECT TO COMPLETION
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 May 13, 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 AGAINST FOR ABSTAIN This proxy when properly executed will
Agreement and Plan of Merger, dated voted in the manner directed herein by the
as of January 20, 1999, by and among undersigned stockholder and at the discretion of
Rental Service Corporation and the proxy holders as to any other business that
NationsRent, Inc. (the "Merger may properly come before the Special Meeting.
Agreement"). ( ) ( ) ( ) 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>
