Reaction to Cerberus’ decision to back out of its acquisition of United Rentals has been mixed (see our lead story below for details). I’ve talked to a number of people and reactions have ranged from total shock from some to others who expected it all along. Given the volatile nature of the credit markets the past few months, I certainly can’t say it never crossed my mind that this would occur. It will be very interesting to see where it goes from here - in other words, will Cerberus and United re-negotiate a new deal or will Cerberus just pay $100 million and move on? This will be a topic of conversation for everybody interested in the rental market for a while.
I do think, however, that Cerberus’ decision has more to do with its own fears of being overexposed amid volatile credit and housing markets than any trepidation it may have had about acquiring United Rentals, whose financial fundamentals and operating results appear sound. I’m not privy to any information from Cerberus, so this is just me offering an opinion, an observer just like many of you, and your opinions are just as valid as mine.
Is this a repeat of the financial community’s cyclical fears about the rental markets, similar to what we saw in the early part of this decade? Again, time will tell, but those of us associated with the rental industry can see that the industry is as strong as ever. Take a look at the quarterly reports from Ahern Rentals and Finning, also in this issue.
So how has 2007 been for you and what are your expectations for 2008? RER is conducting its annual market overview and we want the opinions of all our readers. Please click on the link below and participate in our survey. It will only take a few minutes and by participating you qualify to win an I-Pod Nano.
As for everything else, stay tuned, it’s just starting to get interesting!
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