LONDON - Ashtead Group PLC, parent of Sunbelt Rentals, recently ended its five-month search for a partner to help expand its U.S. operation and will remain an independent company. After the announcement, shares in Ashtead fell 20 percent to a 12-month low, reflecting disappointment in the decision, according to a Financial Times of London report. British analysts speculated that Ashtead rejected an offer from United Rentals, which did enter discussions with Ashtead, according to RER sources.
Ashtead and Sunbelt officials defended the decision. "The money [I was offered] is better invested in Ashtead than in the bank," said Ashtead chairman Peter Lewis said. "You could call it voting with my wallet."
"The board concluded that the offers did not adequately compensate the shareholders for the loss of the growth that could be achieved by us carrying the business forward," Sunbelt chief financial officer Kurt Kenkel told RER.
Last August, Ashtead began considering a possible merger, joint venture or sale to help grow its Sunbelt unit, which spans 11 states and 82 locations between Florida and New Jersey. Sunbelt's goal is to reach 150 locations, primarily through start-ups, by the end of 2002 or early 2003, according to Kenkel.
In other news, Sunbelt recently acquired Ward's Rents in Southampton, Pa.
Sunbelt, No. 11 on the RER 100, accounts for about 40 percent of the Ashtead's profits on an estimated $112 million in 1998 rental revenue.
Ashtead, the United Kingdom's largest equipment rental company with more than $410 million in annual revenue and 261 locations, recently reported a 16 percent increase in half-year profits.
United Rental, National Equipment Services and NationsRent reported same-store revenue growth of between 21 percent and 24 percent for the third quarter ended Sept. 30.