Fort Lauderdale, Fla.-based Republic Services on Monday adopted a plan commonly referred to as a poison pill to hold off an anticipated hostile takeover attempt by Houston-based Waste Management.
The plan would penalize companies that acquire more than 10 percent of Republic’s stock unless the company’s board of directors approves the purchases. Companies that already own more than 10 percent are prohibited from acquiring more than 20 percent of Republic’s stock without the board’s permission.
The move comes after Waste Management last week filed for federal approval to buy Republic’s shares and therefore continue its efforts to acquire the firm. The filing, in turn, came after Republic rejected Waste Management’s unsolicited, $6.2 billion cash takeover offer.
Waste Management remains resolved to continue its acquisition of Republic in order to break up Republic’s earlier agreement to acquire Phoenix-based Allied Waste. “The actions by Republic Services’ board announced today do not change our focus on acquiring Republic,” according to a statement released by Waste Management. “Waste Management made its proposal on July 14, 2008, with the objective of presenting Republic’s board and stockholders a transaction intended to serve the interests of all Republic stockholders as well as Waste Management’s stockholders.”