H&E Equipment Services announced today that it has notified Neff Corp. that it does not intend to submit a revised proposal for the acquisition of Neff, which will permit Neff to terminate H&E’s previously announced agreement to acquired Neff for $21.07 per share.
“We will remain disciplined on the price that we pay for assets,” John Engquist, CEO of H&E said. “We intend instead to pursue an accelerated strategy of greenfield expansion and opportunistic roll-up acquisitions which we believe will be a higher and better use of our resources.”
On July 14, H&E Equipment Services and Neff entered into a merger agreement in which H&E would acquire Neff for $21.07 per share, subject to certain downward adjustments. The agreement provided for a “go-shop” period which enabled Neff to pursue other offers until Aug. 20. On Aug. 13, Neff notified H&E that it had received a proposal from a strategic bidder to acquire Neff for $25 per share, and that Neff intends to terminate the merger agreement to enter into an agreement for that proposal. The identity of the bidder has yet to be disclosed.
Neff was bound by the original contract to negotiate in good faith with H&E for five business days. H&E has now waived this period.
Under the merger agreement, Neff is required to pay a termination fee of approximately $13.2 million to H&E if Neff terminates the merger agreement to enter into an agreement for the new proposal.