United Rental In $1.36B Bid

United Rentals made an unsolicited offer Monday to buy Rental Service at $22.75 per share in a deal valued at about $1.36 billion.

United Rentals (URI), which has passed Hertz as the U.S.'s largest equipment-rental firm, said the offer represents a 32 percent premium over Scottsdale, Ariz.-based Rental Service's (RSV) closing price on Thursday.

Shares of United Rentals gained 1/4 to 28 3/4 ahead of the news on Thursday. Rental Service dipped 1/4 to 17 1/4.

United Rentals CEO Bradley Jacobs said the purchase could help the firm rack up at least $20 million in cost savings. The transaction would be accretive to earnings in the first year of combined operations.

United Rentals would require Rental Service to terminate its merger agreement with NationsRent (NRI) under the deal. NationsRent fell 5/8 to 6 3/8 on Thursday.

The offer expires on April 30 unless it's extended, United Rentals said in a statement.

The offer includes the buyout of Rental Service's 24.3 million shares plus about $810 million in debt for a total of $1.36 billion.

United Rentals has a commitment from Goldman, Sachs & Co. to provide $2 billion in financing to complete the transaction, the company said.

Goldman, Sachs & Co. is serving as financial advisor to United Rentals. Georgeson & Company is serving as information agent for the offer.

Written By Steve Gelsi, CBS MarketWatch