United Rentals' shares could do with a lift

Cerberus Capital Management was set to buy the fellow US business for $4bn (�1.9bn), but pulled out last week, sending United Rental's stock down 31%.

The private equity group said it had the right to abandon the takeover, and was only liable to pay $100m.

A number of such buyouts have been scrapped because of the credit crunch.

This is because private equity firms such as Cerberus typically fund their acquisitions through extensive borrowing, in a process known as a leveraged buyout.

However, with credit now more expensive and harder to come by - as a result of the knock-on effect of record bad debt levels in the US mortgage market - private equity groups are finding it much harder to secure the financial borrowing they need.

'Limited guarantee'

United Rentals said in its legal case that it had the right to force Cerberus to compete the deal at the original price.

Cerberus countered that a "limited guarantee" clause meant it only had to pay $100m to pull out.

Analysts said there were very few examples of a court forcing a buyer to compete a deal it no longer wants.

Cerberus has said it is willing to lower the price of its offer, something United Rentals has said it will not accept.

Other private equity takeovers that have been abandoned in recent weeks, include deals for hi-fi business Harman International Industries and data management company Acxiom.