(Reuters) - United Rentals (NYSE: URI ) dropped its plans to acquire H&E Equipment Services (NASDAQ: HEES ) after the machinery rental firm received a "superior" bid of $3.83 billion from rival Herc Holdings (NYSE: HRI ).

Shares of H&E rose 13% following the offer from Herc, which represented a premium of nearly 20% on the stock's last close on Friday, and valued the company at $104.59 per share.

United Rentals' bid in comparison had valued H&E at $92 a share, or $3.37 billion in equity value, based on a Reuters calculation.

The deals come amid surging demand for industrial equipment, driven by commercial construction firms which have ramped up activity with the help of higher government spending on infrastructure. Machinery production delays have also boosted demand for rentals.

H&E said in a statement that Herc's offer was "superior", but its board of directors has not yet changed its recommendation with respect to the pending transaction with United Rentals.

If the deal is ended, H&E will have to pay United Rentals $63.52 million in termination fees.

Herc, which gatecrashed the deal during H&E's 35-day "go-shop" period, has agreed to pay the termination fees on behalf of the equipment services company.

Herc's bid value of $3.83 billion is based on a Reuters calculation.

Founded in 1961, H&E provides general rental fleet, including aerial work platforms, earthmoving equipment, material handling equipment and other general and specialty lines of equipment.