NEW YORK (CNNfn) - Swedish industrial machinery maker Atlas Copco AB announced Monday it will buy Rental Service Corp. for $730 million, or $29 a share in cash, topping a prior bid for the equipment renter by United Rentals Inc.
Atlas Copco also said it would assume about $900 million in Rental Service debt.
United Rentals, the nation's largest equipment renter, withdrew Monday its $553 million offer, first launched in April, for No. 3 rival Rental Service. That offer included assumption of $810 million in debt.
Rental Service rejected that offer earlier this month, saying it was too low.
"The Atlas Copco offer represents a 27 percent premium over the $22.75 per share being offered in United Rentals' tender offer," said John Sullivan, Rental Service's chairman, in a statement.
Shares of Scottsdale, Ariz.-based Rental Service (RSV) rallied 4-1/2, or 19 percent, to 28-9/16 in Monday morning trading.
Atlas Copco plans to roll Rental Service into its North America unit, with headquarters remaining in Scottsdale, Rental Service said.
Atlas Copco Chief Financial Officer Lennart Johansson told Reuters the company expects savings of at least $20 million from the deal beginning in 2000.
Shares of Greenwich, Conn.-based United Rentals (URI), edged up 7/8 to 27.