Herc Holdings (HRI), owner of equipment rental company Herc Rentals, announced a binding acquisition proposal and merger agreement with H&E Rentals (HEE) that will see it acquire the rental company with a mix of stock and cash. This will have HEE stockholders receive $78.75 in cash and 0.1287 shares of HRI stock for each share they own. This represents a total value of $104.89 per share.
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The offer from Herc surpasses the one made by rival rental company United Rentals (URI), which valued HEE stock at $92 per share in cash. The H&E Rentals Board of Directors said the Herc offer is superior and plans to move forward with it. United Rentals won’t counter the offer and waived its four business day match period.
With this agreement reached, Herc expects to close the deal with H&E Rentals in mid-2025. This will result in HEE investors holding a 14.1% stake in the combined company. Herc also expects $300 million in EBITDA synergies within three years of closing the acquisition.
How This Affects HRI, HEE, & URI Shares Today
News of the acquisition deal has HRI stock down 10.03% as of this writing. At the same time, shares of HEE stock have increased 14.53% while URI stock is down 3.62%. This shows HEE shareholders are excited about the agreement with HRI while URI investors aren’t pleased about the merger being scooped out from under them.
Is HRI Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Herc Holdings is Hold based on two Buy, two Hold, and one Sell ratings over the last three months. With that comes an average price target of $216, a high of $250, and a low of $155. This represents a potential 20.11% upside for HRI stock.
