Ashtead Group plc, parent company of Sunbelt Rentals, said Monday that it is involved in “advanced, exclusive talks” regarding a potential acquisition of a leading U.S. competitor. An Ashtead official said the company may bid as much as $1 billion for the rival company.

Ashtead officials announced the negotiations after its share price dropped unexpectedly in recent days. The shares fell about 13 percent June 28 when Ashtead announced the upcoming retirement of chief executive and founder George Burnett.

Ashtead said the acquisition would be significantly earnings enhancing in the financial year ending April 2008. It added that any potential acquisition would be funded through a 150 million pound (about U.S. $273 million) sale of shares to existing investors. Ashtead officials would not identify the targeted acquisition.

An acquisition of a top 10 U.S. rental company would dramatically increase the size of Ashtead’s largest division, Charlotte, N.C.-based Sunbelt Rentals, No. 4 on the RER 100.