H&E Equipment Services, Inc. announced that it has notified Neff Corporation (“Neff”) 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 merger agreement with Neff.
In connection with that determination, John Engquist, CEO of H&E, stated that, “We will remain disciplined on the price that we pay for assets. 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 for our resources.”
As previously announced, on July 14, 2017, H&E and Neff entered into a merger agreement pursuant to which H&E agreed to acquire Neff for $21.07 per share, subject to certain downward adjustments. On August 13, 2017, Neff notified H&E that it had received a superior acquisition proposal from a strategic bidder to acquire Neff for $25.00 per share, and that Neff intends to terminate the merger agreement to enter into an agreement for such acquisition proposal. Prior to terminating the merger agreement Neffwas required to negotiate in good faith with H&E for five business days. H&E has 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 such acquisition proposal.