Fairholme Capital Management will become a passive investor in the equipment rental company. Fairholme, which holds a 16.6% stake, didn't disclose why it was switching from an active to passive.

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Fairholme Capital Management, United Rentals' largest shareholder, said that a recent amendment to its rights agreement is "unacceptable." UR announced that it had amended the rights plan, or "poison pill," to reduce to 15% from 25% the ownership stake by a shareholder that can trigger the plan. Fairholme said that it is "particularly disturbing" that United Rentals chose to substantively amend the rights agreement at a time when most large public firms have eliminated poison pills. Fairholme holds about 11.18 million shares (18.9%).

Equipment renter United Rentals Inc. said Tuesday it will launch a modified "Dutch auction" tender offer to buy back up to 27.16 million of its shares for up to $679 million.

The company plans to repurchase the shares -- which represent about 31.4 percent of its total outstanding stock -- for between $22 and $25 each, a premium of 13 percent to 28 percent over the stock's closing price of $19.50 on Monday.

A modified "Dutch auction" offer allows shareholders to indicate how many shares and at what price within the company's specified range they wish to tender.

United Rentals also said it repurchased all its outstanding series C and series D preferred stock, most of which was held by Apollo Investment Fund IV LP and Apollo Overseas Partners IV LP, for about $679 million. The buyback prohibits former preferred shareholders from tendering any common stock they hold.

In addition, Leon Black and Michael Gross -- both company directors elected by the former preferred stockholders in relation to terms of the series C preferred shares -- have resigned.

United Rentals said that in connection with the share buybacks it began a new $1.25 billion asset-based loan facility and paid back about $464 million outstanding under a revolving credit facility and term loan. United Rentals issued the former preferred shareholders $425 million worth of 14 percent notes due 2014 as a partial payment for the preferred stock.

The company said it will fund the balance needed for the share buybacks, repayment of its old credit facility and term loan and related fees and expenses with existing cash and about $800 million of borrowings.

The company believes that, excluding a charge of about $235 million related to the preferred stock buyback, the common share repurchases will add to earnings per share.

The stock trades for 5.5x cash flow.

In a recession, that guidance may prove optimistic, but UR has $2 a share in cash, a decent balance sheet, and trades at a price-to-earnings ratio of less than six times. If its earnings were to fall 50%, it would trade at a P/E around 12. Short of a nasty recession, UR's stock drop may present a long-term opportunity.

United Rentals (URI) was upgraded to Buy rating from Neutral at UBS. However, price target dips to $26 from $34.50 and 2008 eps estimates lowered to $2.50 from $2.80.

Bought URI at $18.933 on December 26, 2007. URI closed at $19.05 at the close on December 26, up $0.35. My stop loss is $17.50, which I plan to increase, possibly to 18, depending on the opening action.

URI had generated a bullish kicker signal the day before I bought. This is a strong bullish signal, typically based on news surprises. In this case, URI was seeking to recover $138 million from Cerberus Capital as compensation for a promised takeover by Cerberus that did not occur.

United Rentals (URI) was upgraded from Underweight to Neutral, JP Morgan said. Sell-off in the stock now fully vlaues the company on a standalone basis.

Driven down in a sell-off following Cerebrus walking away from a signed acquistion deal. There is a chamce that Delaware Chancery Court will order specific enforcement of the merger agreement. But, even if that is not in the cards, even assuming Cerebrus was overaying, they were likely not overpaying by some 40% as the current trading price of the stcok would indicate. The current price is probably based upon selling pressure from merger arbiraguers who have no mandate or desire to stay in the stcok once a merger transaction has been called off.

looking to get rick fast haha!