United Rentals filed a motion in a Delaware court requesting summary judgment against Cerberus Capital Management, claiming its decision to back out of its agreement to acquire United “is nothing more than a naked ploy to extract a lower price to the irreparable harm of URI’s stockholders.”
Cerberus withdrew its $34.50-per-share takeover offer for United Rentals Nov. 14. United Rentals filed suit in the Delaware Court of Chancery, seeking to force Cerberus to complete the deal. Cerberus filed suit in New York State Supreme Court seeking “to ensure that United Rentals honors” undertakings made at the time of the deal. The buyout firm says the original agreement caps its liability at $100 million.
Cerberus, responding to the request for summary judgment, said on Friday that United Rentals had surrendered any right to seek “equitable relief, including specific performance.”
The “specific performance” clause in the merger agreement is central to the legal dispute. United Rentals says the clause does not allow Cerberus to terminate the agreement and gives United Rentals the right to have the deal enforced. Cerberus says it is liable only for a $100 million break-up fee and associated costs.
“We are confident that United Rentals’ motion will be defeated and look forward to an expedited trial,” Cerberus said.
