URI went to great lenghts to clear the way for this tender, by buying out Apollo’s bonds, and at a price that implies a URI price around 24. I think some of the big holders such as Fairholme want this to go through at the 22, and would not tende4r their shares any lower given the value of the company.

But I could be wrong….

I was not burned on SHO by any means… it must have resulted in a loss of $100 total ($50 for each of my two accounts). There was a good opportunity to sell out at around $18.00 after management changed the offer price range; in fact, I updated my post when the new information came out.

Arbitrage will no doubt provide positive returns in bear markets, but I must warn that you must read constantly and act quickly.

Thank you for highlighting this important risk. I believe it is a small one, since United Rentals is an above-average company selling at a fair price. As capital expenditures have exceeded depreciation for more than three years, it appears that management sees significant growth prospects. (The earnings record has borne them out.) Meanwhile, the business is selling at a small multiple to its earnings in 2005, when URI’s earning power was lower. We can also infer from the waiver that management thinks $22 is an attractive price.