What Happened?
Shares of machinery provider H&E (NASDAQ:HEES) jumped 107% in the pre-market session after the company agreed to a $4.8 billion takeover by United Rentals, with shareholders receiving $92 per share in cash. This valuation includes about $1.4 billion in net debt. This acquisition value represents more than a 100% premium over HEES's trading price a day before news of the deal was announced.
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What The Market Is Telling Us
H&E Equipment Services’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for H&E Equipment Services and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 9.8% on the news that the company reported underwhelming third-quarter results. Its EPS missed, and its revenue fell short of Wall Street's estimates. Management added, "Industry fundamentals in the third quarter continued to trail year-ago measures." In addition, HEES observed a slowing rate of growth in construction spending in the U.S. in the first half of the year, which is expected to persist through the remainder of the year. Overall, this was a softer quarter.
H&E Equipment Services is up 86.8% since the beginning of the year, and at $90.32 per share, has set a new 52-week high. Investors who bought $1,000 worth of H&E Equipment Services’s shares 5 years ago would now be looking at an investment worth $2,935.
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