SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Amendment No. 6
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
Rental Service Corporation
(Name of Subject Company)
UR Acquisition Corporation
United Rentals, Inc.
(Bidders)
Common Stock, par value $.01 per share
(Title of Class of Securities)
76009V 10 2
(CUSIP Number of Class of Securities)
United Rentals, Inc.
Four Greenwich Office Park
Greenwich, CT 06830
Attn.: Bradley S. Jacobs
Chairman of the Board and
Chief Executive Officer
Telephone:(203) 622-3131
Facsimile:(203) 622-6080
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications on Behalf of Bidders)
Copy to:
Milton G. Strom, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
UR Acquisition Corporation, a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of United Rentals, Inc., a Delaware
corporation ("Parent"), and Parent hereby amend and supplement their Tender
Offer Statement on Schedule 14D-1 (as amended from time to time, the "Schedule
14D-1"), filed with the Securities and Exchange Commission (the "Commission")
on April 5, 1999, with respect to the Purchaser's offer to purchase all of
the shares of common stock, par value $0.01 per share, and the associated
preferred stock purchase rights if and when issued (collectively, the
"Shares"), of Rental Service Corporation, a Delaware corporation (the
"Company"), at a price of $22.75 per Share, net to the seller in cash
(such price, or such higher price per Share as may be paid in the Offer,
the "Offer Price"), upon the terms and subject to the conditions set forth
in the Offer to Purchase and in the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer").
Item 10. Additional Information.
The information set forth in Item 10(c) of the Schedule 14D-1 is
hereby amended and supplemented by the following information:
At 11:59 p.m., New York City time, on April 20, 1999, the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, expired.
The information set forth in Item 10(e) of the Schedule 14D-1 is
hereby amended and supplemented by the following information:
On April 20, 1999, the Company filed a motion for a preliminary
injunction in the United States District Court for the District of
Connecticut (the "Court") to prevent Parent and Purchaser from proceeding
with the Offer (the "Preliminary Injunction"). In the Preliminary
Injunction, the Company claims that Parent stated that the Offer was "fully
financed" and provides "certainty" while allegedly failing to state that
the Offer is subject to what the Company claims is a financing condition
and, as a result, Parent violated Sections 14(d) and 14(e) of the
Securities Exchange Act of 1934, as amended (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
Preliminary Injunction, the Company requested that the Court enjoin
Parent's Offer and compel Parent to make correct disclosures.
On April 20, 1999, Parent and Purchaser filed a motion to dismiss the
Counterclaim of the Company and a memorandum of law in support of the
motion to dismiss the Counterclaim (collectively, the "Motion to Dismiss")
with respect to the litigation initiated by Parent and Purchaser in the
Court on April 7, 1999 (the "Connecticut Litigation"). Parent, in the
Motion to Dismiss, argues that the Court should dismiss the Company's
allegations that Parent 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.
Parent has received a commitment letter (the "Commitment Letter")
from Goldman Sachs Credit Partners L.P., a copy of which has been filed as
Exhibit (b)(i) to this Schedule 14D-1, and, as such, Parent considers the
Offer to be "fully financed". As disclosed in the Offer to Purchase, the
Offer is subject to Parent receiving the funds contemplated by the
Commitment Letter; however, the Offer is not subject to Parent seeking any
other commitment for, or sources of, any financing necessary to consummate
the Offer and the Proposed Merger. While the Company alleges that Parent
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, Parent believes (i) Parent's Motion
to Dismiss should be granted and (ii) the Company's motion for the
Preliminary Injunction is without merit and Parent intends to vigorously
defend itself against this action.
The foregoing is qualified in its entirety by reference to the
complete text of the Company's Preliminary Injunction, a copy of which is
filed as Exhibit (g)(4) hereto, and Parent and Purchaser's Motion to
Dismiss, a copy of which is filed as Exhibit (g)(5) hereto, each of which
is incorporated by reference herein.
The information set forth in Item 10(f) of the Schedule 14D-1 is
hereby amended and supplemented by the following information:
On April 21, 1999, Parent disseminated a letter to certain
institutional and other stockholders of the Company, a copy of which letter
is filed as Exhibit (a)(13) hereto and is incorporated by reference herein.
Unless otherwise indicated herein, each capitalized term used but not
defined herein shall have the meaning ascribed to such term in the Schedule
14D-1 or in the Offer to Purchase referred to therein.
Item 11. Materials to be Filed as Exhibits.
(a)(13) Letter from Parent to certain institutional and other
stockholders of the Company, dated April 21, 1999.
(g)(4) Counterclaimant's Motion for Preliminary Injunction, dated
April 20, 1999, filed by the Company in the United States
District Court for the District of Connecticut.
(g)(5) Plaintiff's Motion to Dismiss Counterclaim of Rental Service
Corporation and Memorandum of Law in Support of Motion to
Dismiss Counterclaim of the Company, dated April 20, 1999,
filed by Parent and Purchaser in the United States District
Court for the District of Connecticut.
SIGNATURE
After due 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.
UR ACQUISITION CORPORATION
By: /S/ JOHN N. MILNE
------------------------
Name: John N. Milne
Title: President
UNITED RENTALS, INC.
By: /S/ BRADLEY S. JACOBS
----------------------------
Name: Bradley S. Jacobs
Title: Chairman and Chief Executive
Officer
Date: April 21, 1999
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- -------- -------
(a)(13) Letter from Parent to certain institutional and other
stockholders of the Company, dated April 21, 1999.
(g)(4) Counterclaimant's Motion for Preliminary Injunction, dated
April 20, 1999, filed by the Company in the United States
District Court for the District of Connecticut.
(g)(5) Plaintiff's Motion to Dismiss Counterclaim of Rental Service
Corporation and Memorandum of Law in Support of Motion to
Dismiss Counterclaim of the Company, dated April 20, 1999,
filed by Parent and Purchaser in the United States District
Court for the District of Connecticut.
UNITED RENTALS, INC.
FOUR GREENWICH OFFICE PARK
GREENWICH, CT 06830
APRIL 21, 1999
DEAR RENTAL SERVICE CORPORATION STOCKHOLDER:
On January 20, 1999, Rental Service's board of directors agreed to a
proposed merger with NationsRent, Inc. Under that proposal, the board
would essentially surrender control of your company to NationsRent. If the
merger is completed, NationsRent will designate 5 of the 9 directors on the
board and NationsRent chairman and CEO James Kirk will be CEO.
On April 5, United Rentals, Inc. commenced a $22.75 per share all cash
tender offer for Rental Service shares, which has resulted in a significant
increase in Rental Service's share price.
UNITED RENTALS' SUPERIOR OFFER
Our tender offer presents a far superior alternative to Rental Service's
proposed transaction with NationsRent. United Rentals' $22.75 cash offer
provides:
o a 45% premium to Rental Service's closing price on December 31, 1998
o a 32% premium to the $17.25 closing price of Rental Service shares on
the last trading day prior to our tender offer announcement
o 28% premium to the 30-day average closing price prior to announcement
of our offer
In addition, our offer provides the certainty of cash, compared to the
uncertainty of stock in a combined NationsRent-Rental Service company
controlled by NationsRent's principal stockholders and management.
Our tender offer price is full and fair based on our analysis of the
available public data. WE PAY A FULL AND FAIR PRICE FOR COMPANIES WE
ACQUIRE, BUT WE WILL NOT OVERPAY. In rejecting our offer, Rental Service
incorrectly stated that our transaction would be highly accretive to United
Rentals' earnings. While this transaction would be of strategic benefit to
United Rentals, our analysis shows only modest accretion to our earnings.
The Rental Service board has tried to confuse stockholders by raising
questions about the financing of our offer. The truth is that United
Rentals has a firm commitment from Goldman, Sachs & Co. to provide
financing to complete this transaction and for other corporate purposes.
REMEMBER: No deal with United Rentals means that Rental Service shares may
fall back to $17.25 per share.
THE RENTAL SERVICE BOARD IS DEPRIVING YOU OF YOUR RIGHT TO CHOOSE
Rental Service's management and board agreed to a deal that would
essentially transfer control of your company to NationsRent just six days
after the then-chairman and CEO Martin Reid told us that Rental Service was
not for sale. The board also took a series of steps to severely limit
other offers. For example:
o The board approved an onerous 19.9% lockup option that could MAKE
POOLING OF INTERESTS ACCOUNTING TREATMENT IMPOSSIBLE FOR UNITED RENTALS
OR ANYONE ELSE.
o An unusually high $40 million "break up" fee is payable to NationsRent
if the merger is not completed for certain reasons. The Rental Service
board has committed YOUR MONEY TO PAY THIS EXORBITANT FEE EVEN IF YOU
VOTE AGAINST THE NATIONSRENT MERGER.
o The Rental Service board responded to our offer by adopting a "poison
pill" TO MAKE IT MORE DIFFICULT FOR UNITED RENTALS, OR ANYONE ELSE, TO
BUY YOUR SHARES.
We believe that you should decide for yourself, without the board's
interference, whether to give up control of your company TO NATIONSRENT IN
A NO PREMIUM MERGER, or to accept UNITED RENTALS' 32% PREMIUM CASH TENDER
OFFER.
Send a Message to the Rental Service Board--
TENDER YOUR SHARES NOW
By tendering your shares now, you can send a strong message to the Rental
Service board that they should support our offer. Time is short. Our
tender offer expires on April 30, 1999. We urge you to tender your shares
today.
Sincerely,
Bradley Jacobs
Chairman and Chief Executive Officer
IF YOU HAVE QUESTIONS, OR NEED ASSISTANCE WITH TENDERING YOUR SHARES YOU
MAY CALL GEORGESON & COMPANY INC.
BANKS AND BROKERS, CALL TOLL FREE (212) 440-9800
ALL OTHERS, CALL COLLECT 1-800-223-2064
Certain Information Concerning Participants
United Rentals, Inc.("United Rentals"), UR Acquisition Corporation
("UR Acquisition") and the following persons named below may be deemed to
be "participants" in the solicitation of consents and/or proxies from
stockholders of Rental Service Corporation ("Rental Service"): the
directors of United Rentals (Bradley S. Jacobs (Chairman of the Board and
Chief Executive Officer), Wayland R. Hicks (Vice Chairman and Chief
Operating Officer), John N. Milne (Vice Chairman, Chief Acquisition
Officer and Secretary), William F. Berry (President), John S. McKinney
(Vice President, Finance), Leon D. Black, Richard D. Colburn, Ronald M.
DeFeo, Michael S. Gross, Richard J. Heckmann, Gerald Tsai, Jr. and
Christian M. Weyer); the following executive officers and employees of
United Rentals: Michael J. Nolan (Chief Financial Officer) and Robert P.
Miner (Vice President, Strategic Planning); the nominees of United Rentals
(the "Nominees") to stand for election to the Board of Directors of Rental
Service (Messrs. Jacobs, Richard N. Daniel, Heckmann, Hicks, Milne, Nolan,
Raymond S. Troubh and Tsai, and Ms. Stephanie R. Joseph); and the
alternate nominees of United Rentals (the "Alternate Nominees") to stand
for election to the Board of Directors of Rental Service (Messrs. William
Aaron, David Bronner, Peter Gold, David Katz, Elliot Levine and Jeffrey
Parker).
As of the date hereof, United Rentals is the beneficial owner of 100
shares of common stock, par value $0.01 per share (the "Common Stock"), of
Rental Service. Other than as set forth herein, as of the date hereof,
neither United Rentals, UR Acquisition nor any of the persons listed
above, has any interest, direct or indirect, by security holding or
otherwise, in Rental Service.
United Rentals has retained Goldman, Sachs & Co. ("Goldman Sachs") to
act as its financial advisor and the Dealer Managers in connection with
the tender offer (the "Offer") by United Rentals and UR Acquisition to
purchase the shares of Common Stock of Rental Service for $22.75 per share
in cash, for which Goldman Sachs may receive substantial fees, as well as
reimbursement of reasonable out-of-pocket expenses. In addition, United
Rentals has agreed to indemnify Goldman Sachs and certain related persons
against certain liabilities, including certain liabilities under the
federal securities laws, arising out of its engagement. United Rentals has
also entered into a commitment letter with Goldman Sachs Credit Partners
L.P. ("GSCP") relating to the financing of the Offer pursuant to which
GSCP may receive substantial fees, as well as reimbursement of reasonable
out-of-pocket expenses. Goldman Sachs does not admit that it or any of its
partners, directors, officers, employees, affiliates or controlling
persons, if any, is a "participant" as defined in Schedule 14A promulgated
under the Securities Exchange Act of 1934, as amended, in the solicitation
of consents and/or proxies, or that Schedule 14A requires the disclosure
of certain information concerning Goldman Sachs. In connection with
Goldman Sachs' role as financial advisor to United Rentals, the following
investment banking 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 and may solicit
consents and/or proxies there from: Bruce J. Evans, Robert D. Lipman,
Jeffrey M. Moslow and Cody J. Smith. 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
its business Goldman Sachs may trade 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. Goldman Sachs has
informed United Rentals that, as of the date hereof, Goldman Sachs held no
shares of the Common Stock of Rental Service for its own account. Goldman
Sachs and certain of its affiliates may have voting and dispositive power
with respect to certain shares of Rental Service Common Stock held in
asset management, brokerage and other accounts. Goldman Sachs and such
affiliates disclaim beneficial ownership of such shares of Rental Service
Common Stock.
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
=========================================
UR ACQUISITION CORPORATION : CIVIL ACTION NO.
and UNITED RENTALS, INC. 399CV00625 (DJS)
:
Plaintiffs,
:
V.
:
JAMES L. KIRK, RENTAL SERVICE
CORPORATION and NATIONSRENT, INC. : APRIL 20, 1999
Defendant. :
=========================================
COUNTERCLAIMANT'S MOTION FOR PRELIMINARY INJUNCTION
Pursuant to Federal Rule of Civil Procedure 65, Rental Service
Corporation ("RSC") hereby moves for an order enjoining UR Acquisition
Corporation, United Rentals, Inc. and Bradley Jacobs (collectively, "URI")
from proceeding with their unsolicited, highly conditional tender offer (or
any future tender offer) for the purchase of RSC's outstanding shares,
unless and until URI complies with all applicable provisions of the federal
securities laws and the effects of URI's unlawful conduct have dissipated.
In support of this motion, RSC states:
1. Seizing on an industry-wide drop in the prices of equipment rental
companies, URI announced, on April 5, 1999, an unsolicited, highly
conditional tender offer for all of the outstanding shares of RSC common
stock (the "Offer"). Concurrently, on April 5, 1999, URI's chairman and
chief executive officer, Bradley Jacobs, stated publicly that URI's Offer
was "fully financed" and offered greater "certainty" than RSC's pending
"merger of equals" with NationsRent, Inc. Similarly, URI's April 5 summary
advertisement and press release described several conditions of the Offer,
but never mentioned any need to secure financing or any financing
condition. URI's voluminous Securities and Exchange Commission filing also
omitted the financing condition in its summary of the conditions to the
Offer.
2. URI's only disclosure of this key condition to date was at the
very end of a boilerplate description of the conditions to the offer at the
back of its filing. URI's misleading statements about the financing for the
Offer and its failure properly to disclose its financing in its public
documents are violations of Sections 14(e) and (d) of the Securities
Exchange Act of 1934 (the "Exchange Act").
3. The provisions of Section 14 of the Exchange Act are designed to
protect stockholders by ensuring that they have adequate and accurate
information on which to base their decisions to sell, tender or hold their
shares. URI's efforts to mischaracterize and conceal its financing
condition and financing uncertainty are depriving RSC, its stockholders and
the investing public of the protections of Section 14. URI's conduct has
harmed RSC's and the public's interest in full disclosure in connection
with tender offers and sound financial markets.
4. Unless URI is ordered to make corrective disclosures and is
enjoined from such further actions, RSC and its stockholders will be forced
to make decisions with respect to the Offer based on inaccurate and
misleading information that does not comply the federal regulatory scheme.
5. Therefore, RSC requests an order enjoining URI from proceeding
with its tender offer unless and until it complies with all applicable
provisions of the federal securities laws and the effects of URI's unlawful
conduct have been dissipated. RSC will file a Memorandum of Points and
Authorities in support of this Motion after discovery is completed and a
full record is assembled.
For the foregoing reasons, RSC's Motion for a Preliminary Injunction
should be granted.
DEFENDANT AND COUNTERCLAIMANT
RENTAL SERVICE CORPORATION
By: /s/ William H. Champlin III
-------------------------------
William H. Champlin III
OF COUNSEL CT04202
Marc W. Rappel TYLER COOPER & ALCORN, LLP
James J. Farrell CityPlace - 35th Floor
LATHAM & WATKINS Hartford, CT 06103-3488
633 W. 5th Street, Suite 4000 (860) 725-6200
Los Angeles, CA 90071 Fax: (860) 278-3802
(213) 485-1234 Its Attorneys
Fax: (213) 891-8763
ORDER
The foregoing motion having been heard is hereby ORDERED: GRANTED/
DENIED.
BY THE COURT
________________________________
Judge/Clerk/Asst. Clerk
CERTIFICATION
This is to certify that I have served a copy of the foregoing
on all counsel and pro se parties of record by causing it to be mailed on
this 20th day of April, 1999 postage prepaid and properly addressed to:
Thomas J. Groark, Jr.
Richard M. Reynolds
Philip S. Wellman
Day, Berry & Howard, LLP
CityPlace I
Hartford, CT 06103
Joseph B. Frumkin
Sullivan & Cromwell
125 Broad St.
New York, NY 10004
James L. Kirk
450 East Las Olas Blvd.
Suite 1400
Fort Lauderdale, FL 33301
NationsRent, Inc.
450 East Las Olas Blvd.
Suite 1400
Fort Lauderdale, FL 33301
/s/ William H. Champlin III
-------------------------------
William H. Champlin III
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
UR ACQUISITION CORPORATION :
and UNITED RENTALS, INC., :
:
Plaintiffs, :
: CIVIL ACTION NO.
-against- : 399CV00625(DJS)
:
JAMES L. KIRK, RENTAL SERVICES :
CORPORATION, and NATIONSRENT, :
INC., :
:
Defendants. : April 20, 1999
PLAINTIFFS' MOTION TO DISMISS
COUNTERCLAIM OF RENTAL SERVICE CORPORATION
Pursuant to Federal Rule of Civil Procedure 12(b)(6), the
Plaintiffs-Counterdefendants UR Acquisition Corp. and United Rentals, Inc.,
and additional Counterdefendant Bradley S. Jacobs, move to dismiss the
Counterclaim of Defendant Rental Service Corporation because it does not
state claims upon which relief can be granted. The grounds for this Motion
are set forth in the accompanying Memorandum of Law.
PLAINTIFFS-COUNTERDEFENDANTS
UR ACQUISITION CORPORATION and
UNITED RENTALS, INC.
ADDITIONAL COUNTERDEFENDANT
BRADLEY S. JACOBS
By: /s/ Robin L. Smith
-----------------------------
Thomas J. Groark, Jr. (ct04245)
Richard M. Reynolds (ct06124)
Philip S. Wellman (ct09636)
Robin L. Smith (ct13345)
DAY, BERRY & HOWARD LLP
CityPlace I
Hartford, Connecticut 06103
(860) 275-0100
Their Attorneys
OF COUNSEL:
Jay B. Kasner
Steven J. Kolleeny
SKADDEN, ARPS, SLATE
MEAGHER & FLOM LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing has been served on the
following counsel and parties this date, via overnight courier:
Marc W. Rappel, Esquire
LATHAM & WATKINS
633 West Fifth Street
Suite 4000
Los Angeles, CA 90071
Joseph B. Frumkin, Esquire
SULLIVAN & CROMWELL
125 Broad Street
New York, NY 10004
James L. Kirk
450 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, FL 33301
Rental Service Corporation
6929 East Greenway Parkway
Suite 200
Scottsdale, AZ 85254
Nationsrent, Inc.
450 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, FL 33301
and via hand delivery to:
William H. Champlin III, Esquire
Mark V. Connolly, Esquire
TYLER, COOPER & ALCORN, LLP
CityPlace I - 35th Floor
Hartford, CT 06103-3488
/s/ Robin L. Smith
-------------------------
Robin L. Smith
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
UR ACQUISITION CORPORATION :
and UNITED RENTALS, INC., :
:
Plaintiffs, :
: CIVIL ACTION NO.
-against- : 399CV00625(DJS)
:
JAMES L. KIRK, RENTAL SERVICES :
CORPORATION, and NATIONSRENT, :
INC., :
:
Defendants. : April 20, 1999
MEMORANDUM OF LAW IN SUPPORT OF
MOTION TO DISMISS COUNTERCLAIM
OF RENTAL SERVICE CORPORATION
Plaintiffs and Counter Defendants UR Acquisition Corp. and United
Rentals, Inc. (collectively, "URI") and additional Counter Defendant
Bradley S. Jacobs respectfully submit this memorandum of law in support of
their motion, pursuant to Fed. R. Civ. P. 12(b)(6) and Section 14 of the
Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. ss. 78n, to
dismiss the Counterclaim of Defendant Rental Service Corporation ("RSC").
PRELIMINARY STATEMENT
RSC's counterclaim, which alleges that URI has failed to disclose the
conditional nature of financing for its tender offer, disregards two facts:
(i) Goldman Sachs provided a firm $2 billion commitment to consummate URI's
tender offer and proposed merger, to refinance certain RSC indebtedness,
and for other corporate purposes, and (ii) URI has fully disclosed the
limited, customary conditions contained in its signed commitment letter.
RSC's counterclaim is little more than a frivolous public relations gambit.
RSC acknowledges, as it must, that URI has in fact disclosed all the
conditions to the Goldman Sachs financing. Nonetheless, RSC complains that
URI violated the securities law anti-fraud provisions when it disclosed
these customary conditions to its financing "only at the very end of a
boilerplate description of the conditions to the offer at the back of its
filing" and not in a summary advertisement, press release, or interview
with a reporter. This aspect of RSC's claim is factually flawed and legally
irrelevant. This circuit routinely holds that an allegation - like RSC's -
that an offeror "buried" information in its filings fails to state a claim
under section 14(e) of the Williams Act when the information in fact
appears in those filings and is accessible to the reasonable investor.
Far from "burying" the customary conditions to the Goldman Sachs
commitment, URI has disclosed all conditions to financing in its Schedule
14D-1 filing. The customary conditions of which RSC complains were
disclosed expressly in the introduction to and section 10 ("Source and
Amount of Funds") of the Offer to Purchase, included as an exhibit to URI's
filing with the Securities and Exchange Commission. They were disclosed yet
again (and in more detail) when URI attached the Commitment Letter from
Goldman Sachs as another exhibit to the filing and were referenced yet
again when, on April 19, 1999, URI filed its fifth amendment to Schedule
14D-1 which directly addresses (and includes in full) RSC's counterclaim.
Because URI has complied fully with the Williams Act, RSC's counterclaim
should be dismissed.
STATEMENT OF FACTS(1)
On April 5, 1999, URI commenced a non-discriminatory, non-coercive,
all-cash offer to purchase all outstanding shares of RSC common stock at a
price of $22.75 per share, representing a 32% premium over the closing
price of such shares on the last trading day prior to the offer ("Tender
Offer"). On that day, URI filed with the Securities and Exchange Commission
information required to be disclosed by Section 14(d) of the Exchange Act
and the rules and regulations promulgated thereunder: a Schedule 14D-1
("14D-1"), and attached several exhibits, including an Offer to Purchase
dated April 5, 1999 ("Offer to Purchase"), Summary Advertisement dated
April 5, 1999 ("Summary Advertisement"), Press Release dated April 5, 1999
("Press Release"), and Commitment Letter from Goldman Sachs Credit Partners
L.P. ("Goldman Sachs") dated April 4, 1999 ("Commitment Letter"). (The
14D-1, including all exhibits is attached hereto as Exhibit A.)
The 14D-1, with its exhibits, discloses in detail the terms and
conditions of the Tender Offer. In the first sentence of the filing, URI
states that the Tender Offer is made "upon the terms and subject to the
conditions set forth in the Offer to Purchase". See 14D-1 at 1. The Offer
to Purchase, in turn, consists of an introduction and seventeen sections,
all referenced in a table of contents, that stockholders are told should be
read in their entirety. See Offer to Purchase at 6.
Section 10 of the Offer to Purchase is a two-and-a-half page section
entitled "Source and Amount of Funds," in which URI details the firm
financing arrangements made with Goldman Sachs in connection with the
Tender Offer. In this section, the Offer to Purchase states that Goldman
Sachs has committed to provide the financing for the Tender Offer "upon the
terms and subject to the conditions set forth in the Commitment Letter".
See Offer to Purchase at 18-19. Moreover, the section discloses that
funding,
will be subject to customary closing conditions, including,
among others (1) execution of satisfactory documentation, (2)
granting of perfected first priority security interests in all
assets to the extent described above, (3) since December 31,
1998, there shall not have been any adverse change in or
affecting the general affairs, management, prospects, financial
position, shareholders' equity or results of operations of
[URI] or [RSC], together with their respective subsidiaries,
which [Goldman Sachs], in its judgment deems material, (4) no
disruption of financial and capital markets, (5) the receipt of
all necessary governmental and third party approvals in
connection with the Facilities and the consummation of the
Offer, and (6) the absence of any litigation that could be
reasonably likely to have a material adverse effect in or
affecting the general affairs, management, prospects, financial
position, shareholders' equity or results of operations of
[URI] or [RSC], together with their respective subsidiaries,
taken as a whole, or the Offer or the Proposed Merger or any of
the Facilities. Although [URI] expects that the Facilities will
be available to provide funds for the consummation of the Offer
and the Proposed Merger in accordance with their respective
terms, there can be no assurance that the Facilities will be
consummated. See "Conditions to the Offer" set forth in Section
14 hereof.
Offer to Purchase at 20.
Section 14 of the Offer to Purchase states that in the event "[URI]
shall not have received the financing for the Offer and the Proposed Merger
pursuant to the Commitment Letter," URI may terminate the Tender Offer. See
Offer to Purchase at 30.
URI's 14D-1 also attaches the Commitment Letter from Goldman Sachs.
Beyond establishing the firm nature of the Goldman Sachs commitment, thi
sletteralso details the precise terms and conditions of the financing. See
Commitment Letter, 14D-1, Exhibit (b)(1). In the Commitment Letter, Goldman
Sachs states that it is "pleased to confirm its commitment to provide [URI]
the full $2.0 billion of the Facilities . . . on the terms and subject to
the conditions contained in this Commitment Letter." See Commitment Letter
at 2. Among the conditions specified in the Commitment Letter are the
customary conditions to closing that URI disclosed in Section 10 of the
Offer to Purchase.
On April 19, 1999, URI filed a fifth amendment to its Schedule 14D-1
(the "Amendment") (attached hereto as Exhibit B) and took issue directly
with RSC's counterclaims. As an exhibit to the Amendment, URI includes the
full text of RSC's counterclaim. Moreover, in the Amendment, URI discloses
that it considers this Tender Offer to indeed be "fully financed" because,
given the Goldman Sachs firm $2 billion commitment, no other source of
financing will be necessary to effect the transaction. The amendment again
acknowledges the customary conditions to the Goldman Sachs commitment
(which were, of course, already disclosed in full in the initial 14D-1
filing). In short, this filing places RSC's and URI's positions on this
entire issue squarely before RSC's stockholders.
ARGUMENT
I. THE UNDERLYING REGULATORY FRAMEWORK:
THE WILLIAMS ACT, AS AMENDED
The Williams Act amendments to the Exchange Act enacted in 1960 is a
broad anti-fraud statute specifically aimed at tender offers for
securities. Its purpose is "to compel the disclosure of information
pertaining to tender offers and offering parties to the public shareholders
of target companies, thereby enabling those shareholders to make informed
decisions regarding the tender offers for their stock." Sydell v.
Ares-Serono, 892 F. Supp. 498, 501 (S.D.N.Y. 1995) (citing Schreiber v.
Burlington Northern, Inc., 472 U.S. 1, 10-11, 105 S.Ct. 2458, 2463-64
(1985)). The Williams Act does not "favor one side or the other in a tender
offer dispute." Iavarone v. Raymond Keyes Assoc., Inc., 733 F. Supp. 727,
734 (S.D.N.Y. 1990) (citations omitted). Rather, the Act and the regulatory
scheme promulgated by the SEC thereunder contain affirmative obligations
and negative restrictions regarding communications with shareholders
applicable both to the offeror and the target company. The purpose of the
disclosure requirements under the Williams Act are fully satisfied "when
shareholders receive the information required to be filed." Treadway Cos.
v. Care Corp., 638 F.2d 357, 380 (2d Cir. 1980).
First, an offeror may commence a tender offer by making an
announcement in the manner proscribed in SEC Rule 14d-2, including by
publication or other public announcement. 17 CFR ss. 240.14d-2. As soon as
practicablE on the date of commencement of a tender offer, the offeror must
file a 14D-1 that, among other things, identifies the offeror, the
offeror's purpose in making the tender offer and the terms of the offer.
See SEC Rule 14d-3, 17 CFR ss. 240.14d-3. The tender offer must be
published, sent, or given to the shareholders of the target company, and a
copy of the 14D-1 must be hand-delivered to the target at its principal
executive office. Id.
Once a tender offer has commenced, the conduct of the target is also
highly regulated. A target may immediately issue a "stop, look, and listen"
statement to its shareholders advising them of when the target will issue a
recommendation with respect to the offer. See SEC Rule 14d-1, 17 CFR ss.
240.14d-9. The target, however, may not issue any solicitation or
recommendation to shareholders, unless as soon as practicable on the date
the solicitation or recommendation is first made, the target files and
distributes a Schedule 14D-9 ("14D-9") setting forth, in full with detailed
reasoning, the target's recommendation with respect to the tender offer.
Finally, all communications regarding the tender offer, including the
14D-1, 14D-9, any amendments thereto, and any press releases or other
public statements, are subject to Section 14(e) of the Williams Act, which
prohibits any person from making "any untrue statement of a material fact
or omit[ting] to state any material fact necessary in order to make the
statements made, in the light of the circumstances under which they are
made, not misleading, . . . in connection with any tender offer or request
or invitation for tenders, or any solicitation of security holders in
opposition to or in favor of any such offer, request, or invitations." 15
U.S.C. ss. 78n(e) (1998).
URI's disclosures in connection with this Tender Offer are complete
and accurate, and they comport fully with the requirements of the Williams
Act. URI's full and fair disclosure of all the conditions of its financing,
coupled with the frivolous character of RSC's claimed "omissions", require
that this counterclaim be dismissed.
II. URI, IN ITS INITIAL SCHEDULE 14D-1, FAIRLY AND FULLY
DISCLOSED THE NATURE OF ITS FINANCING COMMITMENT
A. URI Fairly and Fully Disclosed The Fact That Goldman Sachs
Has Made a Firm Commitment of $2 Billion, And The Conditions To
That Commitment
The gravamen of RSC's claim is that URI has deceived RSC
shareholders. RSC contends that because URI has stated to the media that it
has a firm financing commitment from Goldman Sachs, but has not at the same
time discussed, in each communication all the conditions to that firm
commitment, URI has engaged in a deceptive scheme in violation of the
securities laws. Countercl. P. P. 18, 23. RSC claims that corrective
disclosures and an injunction are necessary to prevent RSC's stockholders
from making a decision based on "inaccurate and misleading" information.
See Countercl. Prayer For Relief.
i. The Goldman Sachs Commitment
The Commitment Letter speaks for itself: Goldman Sachs has provided a
firm $2 billion commitment to consummate URI's tender offer and proposed
merger, to refinance certain RSC indebtedness, and for other corporate
purposes. RSC may choose to ignore the import of a firm commitment from
Goldman Sachs, but that does not somehow transform the legitimate
representations that URI has made to the public regarding the security of
this financing into Williams Act violations. With the Goldman Sachs
commitment in place, URI need not secure any other source of financing to
complete its Tender Offer. URI has made a certain offer to the RSC
stockholders, and URI's statements to that effect have been accurate. RSC's
claim to the contrary is nonsense.
ii. The Commitment Is Subject Only To Customary and
Usual Conditions
In the face of URI's fully-financed, all-cash offer, RSC points to
standard and customary conditions for a transaction of this nature, and
attempts to create a cloud of doubt and uncertainty as to URI's ability to
finance the Tender Offer. None of the conditions, however, undermines
Goldman Sachs' firm commitment, and all of them were disclosed to RSC's
stockholders.
The conditions to Goldman Sachs' commitment themselves are
unremarkable. See Offer to Purchase ss. 10; Commitment Letter at 2. A
reasonable investor would not be surprised to discover that Goldman Sachs
insists on proper loan documentation before providing $2 billion for a
transaction. Nor would an investor debate why it is that Goldman Sachs
insists that a proposed transaction comply with governmental regulations
before supplying this amount of capital, or why it insists that the
business prospects of the companies involved are, at the time the finds are
provided, be as they were stated to be when the commitment was made. Simply
put, a reasonable investor would not consider these customary financing
conditions as significant factors in his or her decision-making process. In
fact, a reasonable stockholder would be shocked if customary conditions
such as these were not part of a $2 billion financing commitment.
Of equal importance, the very conditions that RSC claims have been
"omitted" from URI's statements to RSC shareholders are in fact fully
disclosed in URI's public filings. Section 10 of URI's Offer to Purchase
details the conditions to the Goldman Sachs financing. Furthermore, the
Commitment letter itself, is an exhibit to URI's 14D-1 filing. And now, to
ensure that this issue is rendered moot, URI has again referenced these
customary conditions as part of full public disclosure of RSC's meritless
claims. See Schedule 14D-1 Amendment No. 5. There is no misrepresentation
here. RSC's claims are groundless and must be dismissed.
B. URI Did Not "Bury" The Conditions
RSC does not and cannot dispute that the very conditions of which it
complains are in fact fully disclosed in URI's public filings. Instead, RSC
complains that URI "buried" these "troubling" conditions regarding its
Tender Offer financing "deep within the Offer to Purchase". Countercl. P.
12. As discussed above, RSC's premise is simply wrong, as the customary
conditions to the Goldman Sachs commitment are discussed directly in two
separate portions of URI's 14D-1.
More importantly, as a legal matter, RSC's premise is irrelevant,
because all of the conditions to URI's financing (indeed, to the entire
Tender Offer) are in fact disclosed in a full and fair fashion. This Court
need look no further than URI's public filings to dispose of RSC's
meritless counterclaims. See In re Hunter Envtl. Servs., Inc. SEC Litg.,
921 F. Supp. at 914, 918 (D. Conn. 1996) (In a securities case, "if the
[SEC filings and other] documents portray a picture substantially different
from that painted by the plaintiff in the complaint, the court will base
its decision on the scenario supported by the complete exhibits.").
At least one District Court in this Circuit has addressed and
rejected an argument nearly identical to the one RSC advances. In
Consolidated Gold Fields v. Anglo American Corp. of South Africa, Ltd, 713
F. Supp. 1457 (S.D.N.Y. 1989), the target of a tender offer claimed that
the offeror had violated the Williams Act by "burying" valuation
information in its 14D-1 filing. The court disagreed, relying on the
principal that it is
sufficient if the company provides information as to material
facts in a format from which a reasonable investor could reach
his own conclusions as to the risks of the transaction.
Consolidated Gold Fields, 713 F. Supp. at 1470. In that case, the valuation
information was not prominently displayed, but was referenced in footnotes.
Because the information was available and accessible to the reasonable
investor, there was simply no violation of the anti-fraud provisions of the
securities laws. Id. at 1471.
As a general proposition, this Circuit has routinely rejected claims
similar to RSC's where a purported violation was premised on the placement
of information in a required filing. See Kramer v. Time Warner, 937 F.2d
767 (2d Cir. 1991) (Warner management's conflict of interest was adequately
disclosed where the filing incorporated by reference relevant portions of
the Joint Proxy Statement that disclosed the information); Feder v.
MacFadden Holdings, Inc., 698 F. Supp. 47, 51 (S.D.N.Y. 1988) (condition to
tender offer was not "buried" when it was mentioned in the introductory
section of the Offer to Purchase and was cross-referenced and discussed in
more detail in a subsequent section of the document).
There is no doubt that URI's disclosure of its financing condition is
well within the bounds of the securities laws. The Tender Offer begins with
an admonition that it is subject to the conditions in the Offer to
Purchase. The Offer to Purchase, in turn, devotes an entire section to the
financing of the tender offer, including the customary conditions to the
Commitment Letter imposed by Goldman Sachs. See Offer to Purchase at 18-21
(ss. 10). Finally, URI included in its 14D-1 the Commitment Letter itself,
so that any investor may examine all aspects of the Goldman Sachs
agreement.
In short, the information regarding the Goldman Sachs $2 billion
commitment, including the customary conditions thereto closing, is readily
available to RSC's stockholders. Because this is plain from the documents
themselves, RSC's claims should be rejected.
III. IN ANY CASE, THIS ISSUE HAS BEEN
FULLY ADDRESSED IN URI'S AMENDED 14D-1 FILING
Even if, arguendo, the disclosures in URI's initial 14D-1 were, in
any way, incomplete --which they were not --URI's Amendment to its Schedule
14D-1 (Amendment No.5) filed on April 19, 1999, renders RSC's counterclaim
moot. In the Amendment, URI puts before RSC's stockholders the full nature
of the current dispute. Far from attempting to conceal facts from the
public, URI has again provided RSC stockholders with all the information
necessary to make an informed choice. Even if there had been some confusion
among RSC stockholders regarding URI's financing -and there was not - that
confusion would now be gone. RSC stockholders can therefore decide for
themselves whether the Goldman Sachs $2 billion commitment represents
certainty in this Tender Offer.
A. The Amendment Discloses Both Rsc's and Uri's Positions
in Full
To eliminate any doubt that RSC stockholders have a full and fair
picture of the Tender Offer's financing and RSC's complaints in this
regard, URI, in the Amendment, fully discloses both RSC's and URI's
position on this issue. RSC's counterclaim is included, in full, as an
exhibit to the filing, so it cannot be asserted that URI is
mischaracterizing RSC's position. URI offers a brief restatement of its own
position. Finally, all possible contingencies with the financing of the
Tender Offer are set out, once again, either directly, or by reference to
prior filings, so that stockholders may make their own assessment of the
certainty of URI's offer. Given the full nature of the disclosure on this
issue, RSC's counterclaim is moot. See West Point -Pepperell, Inc. v.
Farley, Inc., 711 F. Supp. 1088, 1094 (N.D. Ga. 1989); Arvin Industries v.
Wanandi, 722 F. Supp. 532, 539 (S.D. Ind. 1989) Avnet v. Scope, 499 F.
Supp. 1121, 1124 (S.D.N.Y. 1980) (amendment to SEC filling was sufficient
to cure any defect in prior filing)
B. The Total Mix of Information On This Issue Is Complete
URI believes that all of the material facts regarding the financing
of this Tender Offer have been disclosed, at multiple times and in multiple
places. To the extent that any additional facts might exist on this issue,
such facts could not alter the total mix of information already available
to the RSC shareholders, and hence, they would not be material.
Before an omission runs afoul of the Williams Act, it must be
material. Consolidated Gold Fields, 713 F. Supp. at 1470 (citing Basic Inc.
v. Levinson, 485 U.S. 224 (1988)). The test for materiality is
well-established: The omitted fact must have been one that would have had
actual significance in the deliberations of the reasonable shareholder, or,
put another way
there must be a substantial likelihood that the disclosure of
the omitted fact would have been viewed by the reasonable
investor as having significantly altered the 'total mix' of
information made available.
Avnet v. Scope Industries, 499 F. Supp. 1121, 1127 (S.D.N.Y. 1980) (citing
TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976) (emphasis
added)).
WHEREFORE, In light of URI's full disclosure of the Commitment
Letter, RSC's claim should be dismissed, with prejudice.
PLAINTIFFS-COUNTER DEFENDANTS
UR ACQUISITION CORPORATION and
UNITED RENTALS, INC. and COUNTER-
DEFENDANT BRADLEY JACOBS
By: /s/ Robin L. Smith
_________________________________
Thomas J. Groark, Jr. (ct04245)
Richard M. Reynolds (ct06124)
Philip S. Wellman (ct09636)
Robin L. Smith (ct13345)
DAY, BERRY & HOWARD LLP
CityPlace I
Hartford, Connecticut 06103
(860) 275-0100
Their Attorneys
OF COUNSEL:
Jay B. Kasner
Steven J. Kolleeny
SKADDEN, ARPS, SLATE
MEAGHER & FLOM LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing has been served on the
following counsel and parties this date, via overnight courier:
Marc W. Rappel, Esquire
LATHAM & WATKINS
633 West Fifth Street
Suite 4000
Los Angeles, CA 90071
Joseph B. Frumkin, Esquire
SULLIVAN & CROMWELL
125 Broad Street
New York, NY 10004
James L. Kirk
450 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, FL 33301
Rental Service Corporation
6929 East Greenway Parkway
Suite 200
Scottsdale, AZ 85254
Nationsrent, Inc.
450 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, FL 33301
and via hand delivery:
Willaim H. Champlin III, Esquire
Mark V. Connolly, Rsquire
TYLER, COOPER & ALCORN, LLP
Cityplace I - 35th
Floor Hartford, Ct 06103-3488
/s/ Robin L. Smith
________________________
Robin L. Smith
