United Rentals Inc. (NYSE: URI) is seeing shares surge in pre-market trading.  It seems it is doing what the old private equity acquisition couldn’t do.  It isn’t going private, but it is cleaning up its books and retiring a large portion of its common stock and preferred shares.

The company is tendering to repurchase up to 27,160,000 shares of common stock through a modified dutch auction at a price not less than $22.00 and not greater than $25.00.  Shares closed at $19.50 yesterday and its 52-week trading range is $14.83 to $34.98.

The number of shares to be repurchased in the tender offer represents approximately 31.4% of the total outstanding number of shares.  If fully subscribed, the total purchase price for the common stock would be roughly $679 million.

The company plans to commence the tender offer within the next week and will keep the offer open for at least 20 business days.

It has also repurchased all of its outstanding Series C preferred stock and Series D preferred stock, in which a substantial majority was held by Apollo Investment Fund.  The total purchase price for the preferred stock is approximately $679 million.

As part of this financing United Rentals entered into a new $1.25 Billion asset-based loan facility yesterday and it repaid approximately $464 million outstanding under its former revolving credit facility and term loan.

Shares are up over 15% at $22.61 right after the open.

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Jon Ogg
June 10, 2008

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