SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
AMENDMENT NO. 25
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
(collectively with the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of April 16,
1999 and amended as of June 9, 1999 (the "Rights Agreement"), between
Rental Service Corporation and ChaseMellon Shareholder Services, L.L.C.,
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"). 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 10. ADDITIONAL INFORMATION.
The information set forth in Item 10(e) of the Schedule 14D-1 is
hereby amended and supplemented by the following information:
On June 16, 1999 the United States District Court for the District of
Connecticut (the "Connecticut Court") entered a Memorandum of Decision
dismissing the Company's remaining Exchange Act counterclaims in the
pending litigation before the Connecticut Court on the ground that they
failed to state claims for violation of the securities laws.
The foregoing is qualified in its entirety by reference to the
complete text of the Memorandum of Decision, a copy of which is filed as
Exhibit (g)(21) hereto, which is incorporated by reference herein.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(27) Press Release of Parent dated June 17, 1999.
(g)(21) Memorandum of Decision by the United States District
Court for the District of Connecticut, dated June 16,
1999.
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: June 17, 1999
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
------- -------
(a)(27) Press Release of Parent dated June 17, 1999.
(g)(21) Memorandum of Decision by the United States District
Court for the District of Connecticut, dated June 16, 1999.
[UNITED RENTALS LOGO]
FOR IMMEDIATE RELEASE
UNITED RENTALS WINS MOTION TO DISMISS IN FEDERAL COURT
Court Confirms Accuracy of Disclosure on Tender Offer Financing
GREENWICH, CT, JUNE 17, 1999 -- United Rentals, Inc. (NYSE: URI)
announced today that the United States District Court for the District of
Connecticut dismissed the only remaining counterclaims of Rental Service
Corporation (NYSE: RSV) pending in the court.
In its decision, the court determined that United Rentals'
characterization of its tender offer as fully financed and all cash
accurately reflected the offer in light of United Rentals' firm commitment
from Goldman, Sachs & Co. The court also concluded that United Rentals'
Offer to Purchase adequately disclosed the financing arrangements with
Goldman Sachs.
"We're pleased with today's decision to dismiss Rental Service's
counterclaims, which we regarded from the beginning as meritless," said
Bradley Jacobs, chairman and chief executive officer of United Rentals.
United Rentals also said that it was continuing its tender offer and
consent solicitation to unseat the Rental Service board.
United Rentals, Inc. is the largest equipment rental company in North
America and serves over 900,000 customers through its network of 506
locations in 41 states, six Canadian provinces and Mexico.
###
Investor contact: Media contact:
Robert Miner Fred Bratman or Tracy Williams
United Rentals, Inc. Sard Verbinnen & Co.
Phone: 203-622-3131 Phone: 212-687-8080
Fax: 203-622-6080 Fax: 212-687-8344
E-mail: [email protected] E-mail: [email protected]
or [email protected]
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
UR ACQUISITION CORP. AND :
UNITED RENTALS, INC.,
Plaintiffs, :
v. : CASE NO: 3:99CV625 (DJS)
RENTAL SERVICES CORP., :
Defendant,(1)
Counterclaim Plaintiff, :
v. :
UR ACQUISITION CORP., UNITED :
RENTALS, INC., BRADLEY S.
JACOBS, RICHARD J. HECKMANN, :
WAYLAND R. HICKS, JOHN N.
MILNE, MICHAEL J. NOLAN, :
and GERALD TSAI, JR.,
Counterclaim Defendants. :
MEMORANDUM OF DECISION
Now pending before the court are a series of motions pertaining to
this action arising from a proposed merger between defendant Rental
Services Corp. ("RSC") and NationsRent, Inc. ("NRI") and a competing tender
offer made by the plaintiffs, UR Acquisition Corp. and United
--------------------
1 The plaintiffs' claims against defendants James L. Kirk and
NationsRent, Inc. were dismissed without prejudice pursuant to the
parties' stipulation dated June 4, 1999. See doc. # 58. Accordingly,
Rental Services Corp. is the only remaining defendant in this action.
Rentals, Inc. (collectively "URI") to purchase all of the outstanding
shares of RSC common stock. URI has alleged violations of Sections 14(a),
(d) and (e) of the Securities Exchange Act of 1934 ("Exchange Act"), 15
U.S.C. sections 78n(a), (d), (e). RSC has filed a countersuit alleging
violations of Section 14(d) and (e) of the Exchange Act, 15 U.S.C. sections
78n(d), (e), as well as Section 8 of the Clayton Act, 15 U.S.C. section 19.
As a threshold matter, URI has moved to dismiss RSC's amended
counterclaims pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons that
follow, the motion to dismiss is GRANTED.
I. FACTS
The court accepts as true for the purposes of this motion to dismiss
the facts as put forth in RSC's amended counterclaims. See Am.
Counterclaims and Jury Demand (doc. # 19), paragraphparagraph 3-20, 33-38.
II. STANDARD
In assessing a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a
court must determine whether the plaintiff has a valid claim under any
possible theory upon which relief may be granted. Steiner v. Shawmut Nat'l
Corp., 766 F. Supp. 1236, 1241 (D. Conn. 1991). "'[A] complaint should not
be dismissed for failure to state a claim unless it appears beyond doubt
that the plaintiff can prove no set of facts in support of his claim which
would entitle him to relief.'" Presnick v. Santoro, 832 F. Supp. 521, 525
(D. Conn. 1993) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The
facts alleged in the complaint should be taken as true and any inferences
from the plaintiff's allegations should be drawn in the light most
favorable to the plaintiff. See id. at 524-525.
Although the court is primarily focused on the allegations within the
counterclaims in passing upon a Rule 12(b)(6) motion, in a securities fraud
action the court also may consider any written instrument attached to the
counterclaims, statements or documents incorporated into the counterclaims
by reference, and any statements or documents upon which the counterclaim
plaintiff relied in bringing suit. See In re Hunter Environmental
Services, Inc. Securities Litigation, 921 F. Supp. 914, 917 (D. Conn.
1996). In addition, a trial court can "'take judicial notice of the
contents of relevant public disclosure documents required to be filed with
the SEC.'" Id. (citations omitted). If the full text of the additional
documents reveal that the counterclaim plaintiff cannot possibly prove a
claim, then the claim will be dismissed. See Barnum v. Millbrook Care Ltd.
Partnership, 850 F. Supp. 1227, 1232-33 (S.D.N.Y.) (holding that if the
allegations in the complaint are contradicted by the documents, the
documents control), aff'd, 43 F.3d 1458 (2d Cir. 1994).
III. DISCUSSION
RSC's amended counterclaims contain four counts alleging that: (count
one) URI has made representations with respect to the nature of its
financing arrangements in press releases and public statements which
constitute fraudulent, deceptive, or manipulative practices in connection
with its tender offer in violation of Section 14(a) of the Exchange Act;
(count two) URI has failed to adequately disclose all material information
regarding the financing for its tender offer in its Schedule 14D-1, either
in its original or amended forms, in violation of Section 14(d) of the
Exchange Act; (count three) URI has proposed a slate of nine nominees to
replace the current eight member Board of Directors of RSC, six of whom are
officers and/or directors of URI, and whose election to the RSC Board would
result in interlocking directorates between competitors in violation of
Section 8 of the Clayton Act; and (count four) there exists a controversy
between RSC and URI as to the legality of URI's attempts to elect the new
nominees to RSC's Board, and as to RSC's obligation to recognize those
attempts under governing law, such that a declaration of the parties's
rights and responsibilities is necessary to resolve this dispute.
A. URI's Tender Offer: Violation of section 14 of the Exchange Act
1. Public Statements
In count one of its counterclaims, RSC alleges that URI violated
Section 14(e) of the Exchange Act, 15 U.S.C. section 78n(e),(2) by
representing in various press releases, letters, and public statements that
it had a "firm commitment" from Goldman Sachs to finance the tender offer,
and that its offer was "fully financed" and "all cash," offering greater
"certainty" to RSC's shareholders. RSC contends that URI's public
statements provided a seemingly comprehensive list of seven key conditions
of the tender offer, but failed to disclose the conditional nature of the
financing, thereby constituting a material omission in connection with its
tender offer. RSC also contends that URI's characterization of its
----------------------
2 Section 14 of the Exchange act makes it unlawful for any person to
make any untrue statement or to engage in any fraudulent,
deceptive, or manipulative acts in connection with any tender
offer. See 15 U.S.C. section 78n(e).
financing as complete was misleading because it remained subject to a
series of conditions which URI failed to disclose. URI stands by its
representations as accurate and not materially misleading, especially when
viewed in conjunction with its Schedule 14D-1 filing, which fully disclosed
all aspects of its financing arrangements.
Upon review of all of the relevant documents, the court concludes that
URI's characterizations of its tender offer as "fully financed," "all cash"
and providing greater "certainty" were not materially misleading in light
of the fact that URI had obtained a firm commitment from Goldman Sachs to
provide the requisite financing in the form of a commitment letter. See
CRTF Corp. v. Federated Dep't Stores, Inc., [1988 Transfer Binder] Fed.
Sec. L. Rep. (CCH) paragraph 84,224 (S.D.N.Y. March 28, 1988) (binding
agreement to provide financing, such as a commitment letter, would be a
firm financing commitment). Moreover, there is nothing in the conditions
to which the Goldman Sachs financing is subject that would militate against
this being a binding financing commitment upon which an investor could
reasonably rely. See In re Hunter Environmental Services, Inc. Securities
Litigation, 921 F. Supp. 914, 922 (D. Conn. 1996) (the materiality of
omissions can be decided as a matter of law if "reasonable minds cannot
differ" as to the effect of the information or omission on the
shareholders).
With respect to any statements outlining the conditions of the tender
offer, the court concludes that those statements accurately reflected the
offer without being materially misleading. In contrast to the statements
at issue in Chris-Craft Indus., Inc. v. Piper Aircraft Corp., 480 F.2d 341
(2d Cir.), cert. denied, 414 U.S. 910 (1973), cited by RSC, the statements
in the instant action did not give the appearance of exclusivity when
discussing the conditions of the tender offer. Cf. Chris-Craft, 480 F.2d
at 365 (violation of section 14(e) to publish a list of conditions giving
the appearance of being exclusive, thereby solidifying the impression that
the sale of certain piper shares was all but formally completed, when in
fact the purchaser could return all the shares for a refund of its purchase
price plus interest within six months). Rather, all of the public
statements at issue here referenced the financing arrangements made with
Goldman Sachs, and the formal press releases explicitly directed the
shareholders to the Offer to Purchase for details of the proposed
transaction. Cf. Joyce v. Joyce Beverages, Inc., 571 F.2d 703, 707 (2d
Cir.) (failure to disclose certain changes in stock rights effected by
proposed consolidation, such as loss of preemptive rights and the
discontinuance of cumulative voting, was potentially materially
misleading), cert. denied, 437 U.S. 905 (1978); Peregrine Options, Inc. v.
Farley, Inc., No. 90 C 285, 1993 WL 489739, at *13-17 (N.D. Ill. Nov. 19,
1993) (public communications concerning proposed merger conveying false
impression that the merger was not contingent on procurement of financing
and would occur as a matter of course upon the successful completion of the
tender offer may constitute material omissions such that dismissal of
complaint is inappropriate).(3)
Finally, even if either URI's characterization of its offer as fully
financed or its descriptions of the financing arrangements for the offer
were misleading, the court finds that any omissions or misstatements were
immaterial in light of the "total mix" of information available to the
shareholders by way of the formal proxy materials which, as will be
discussed below, adequately revealed the status of URI's financing
arrangements. See In re Hunter, 921 F. Supp. at 920 (information is
material "only if its disclosure would alter the 'total mix' of facts
available to an investor and 'if there is a substantial likelihood that a
reasonable shareholder would consider it important' to the investment
decision") (citations omitted). Accordingly, the court finds that count
--------------------
3 To the extent that any short responses given by Mr. Jacobs to
inquiries by the press failed to explic- itly direct shareholders
to the formal tender offer, the court declines to find a technical
violation of the Exchange Act based upon these cursory, limited
statements, in light of the fact that Mr. Jacobs' comments always
revealed the existence of a financ- ing arrangement with Goldman
Sachs and the tender offer fully disclosed the terms of this
arrangement.
one of RSC's counterclaims fails to state a violation of Section 14(e) of
the Exchange Act, and should be dismissed.
2. Schedule 14D-1
RSC alleges in count two of its counterclaims that URI failed to
adequately disclose all material information regarding the financing for
its tender offer in its Schedule 14D-1 filed with the SEC and mailed to
RSC's shareholders, in violation of Section 14(d) of the Exchange Act, 15
U.S.C. section 78n(d).(4) Specifically, RSC contends that URI intentionally
failed to list financing as a specific condition of the tender offer in
bold print with the other enumerated conditions. Instead, URI buried the
conditional nature of the financing for the tender offer by pointing the
shareholder to a subsection of the Offer to Purchase for other conditions
of the offer, which section includes the need to obtain financing among a
densely worded four page section, and to the Goldman Sachs Commitment
Letter for the terms of the financing agreement. URI denies that it buried
the relevant financing information, and points out that it referenced its
financing arrangements, or pointed the reader to the appropriate section of
the Offer to Purchase where the arrangements are clearly spelled out, on
the cover page of the Offer to Purchase, in the Table of Contents of the
document, in a section entitled "Certain Conditions of the Offer," and in a
section entitled "Source and Amount of Funds." Moreover, URI attached to
its tender offer Goldman Sachs' Commitment Letter, which clearly outlines
the terms of the financing arrangement.
Following a review of all the relevant documents, the court concludes
that URI's Schedule 14D-1 and Offer to Purchase adequately disclosed URI's
financing arrangements with Goldman Sachs. The court is satisfied that the
conditions upon which Goldman Sachs' financing commitment is based are not
buried within the document, but instead are clearly set forth in the Offer
--------------------
4 Section 14(d) of the Exchange Act mandates that a tender offer must
disclose certain specified infor- mation to investors, and requires
the offeror to file such information with the SEC on a Schedule
14D-1, which must disclose all known material infor- mation
regarding financing for the tender offer. See 15 U.S.C. section
78n(d).
to Purchase itself, and are also enumerated again in the Goldman Sachs
Commitment Letter, attached to the Schedule 14D-1. See Greenapple v.
Detroit Edison Co., 618 F.2d 198, 210 (2d Cir. 1980) ("[D]isclosure in a
prospectus must steer a middle course, neither submerging a material fact
in a flood of collateral data, nor slighting its importance through
seemingly cavalier treatment. The import of the information conveyed must
be neither oversubtle nor overplayed, its meaning accurate, yet
accessible."). Moreover, the court does not find that URI buried its
facts, engaged in circumlocution or employed the fragmentation technique to
the extent that these techniques were rejected in the cases cited by RSC.
See Mills v. Electric Autolite Co., 403 F.2d 429 (7th Cir. 1968), judgment
rev'd on other grounds, 396 U.S. 375 (1970); Gould v. American Hawaiian
Steamship Co., 331 F. Supp. 981 (D. Del. 1971); Norte & Co. v. Huffines,
304 F. Supp. 1096 (S.D.N.Y. 1968). Because "the prospectus, as written,
adequately apprises the reader of the essential nature of a material facet
of the issuer's financial [arrangements]," Greenapple, 618 F.2d at 211, the
court finds that count two of RSC's counterclaims fails to state a
violation of Section 14(d) of the Exchange Act, and should be dismissed.(5)
B. RSC Board Nominees: Violation of section 8 of the Clayton Act
The parties entered the following stipulation on the record at a
hearing before the undersigned on June 11, 1999, which resolves the dispute
surrounding URI's proposed nominees to RSC's Board outlined in RSC's third
and fourth counterclaims.
Based on the representations of counsel for United Rentals Inc.
("URI") that no officer, director or employee of URI will be
nominated to serve, or serve, as a director of Rental Services
Corporation ("RSC") and the withdrawal of URI's nominees who were
officers or directors of URI, the court dismisses RSC's third and
fourth counterclaims for violations of Section 8 of the Clayton
Act on the ground that they are moot. The court makes no finding
regarding the merits of these claims.
--------------------
5 Because the court finds that URI's initial Schedule 14D-1
adequately disclosed all material facts with respect to its
financing arrangements, the court need not address the parties'
argument concerning whether URI adequately corrected any
misstatements or omissions by amending its Schedule 14D-1 to
include the parties' pleadings.
IV. CONCLUSION
The court rules on the pending motions as follows:
1. Doc. # 27: The counterclaim defendants' motion to dismiss the
amended counterclaims, dated 4/29/99, is GRANTED;
2. Doc. # 15: The counterclaim defendants' earlier motion to
dismiss the original counterclaims, dated 4/20/99, is DENIED as
moot in light of the amended counterclaims filed on 4/22/99;
3. Doc. # 12: In light of the court's ruling dismissing the amended
counterclaims, the counterclaim plaintiffs' motion for a
preliminary injunction enjoining the counterclaim defendants from
proceeding with their tender offer, dated 4/20/99, is DENIED as
moot;
4. Doc. # 20: In light of the parties' stipulation concerning URI's
proposed nominees to the Board of Directors of RSC, the
counterclaim plaintiffs' motion for a preliminary injunction
enjoining the counterclaim defendants from nominating any
director or officer of URI to the Board of Directors to RSC,
dated 4/22/99, is DENIED as moot;
5. Dosc. ## 3, 5: The plaintiffs' motions for expedited discovery
and for a preliminary injunction enjoining the defendants from
soliciting any RSC shareholers concerning URI's tender offer are
DENIED without prejudice to renewal should the plaintiffs choose
to further pursue this remedy.
So ordered, this 16th day of June, 1999, at Hartford, Connecticut.
/s/ Dominic J. Squatrito
-----------------------------
Dominic J. Squatrito
United States District Judge
