Houston-based Waste Management has announced a bid to acquire Republic Services. The offer includes acquiring all of Republic’s outstanding common stock for $34 per share in cash — approximately a 22 percent premium on the closing price of Republic’s shares as on July 11. Waste Management's approximately $6.2 billion offer comes weeks after Fort Lauderdale, Fla.-based Republic agreed to buy Phoenix-based Allied Waste, pending customer shareholder and regulatory approval, and is an attempt to prevent that merger from taking place.
“Our $34.00 per share all-cash proposal clearly offers a better and more certain value alternative to Republic stockholders than the recently announced Republic-Allied Waste Industries, Inc. transaction,” said David Steiner, CEO of Waste Management, in a press release. “We believe our proposal is a superior proposal.”
Republic released the following statement this morning: "The board of directors of Republic Services, along with its legal and financial advisors, will carefully review the proposal received from Waste Management consistent with its fiduciary duties. Following its review, the board will respond in due course."
In the latest Waste Age 100 ranking of the largest solid waste companies, which is available in the June issue of the magazine, Waste Management topped the list with $13.31 billion in 2007 revenue. Allied ranked second, with $6.07 billion in revenue last year, and Republic ranked third, with $3.18 billion in revenue.
Waste Management believes that its proposed deal to Republic would close in early 2009. According to Steiner’s letter to Republic CEO James O’Connor, the offer would require the approval of Republic’s shareholders, but not of Waste Management’s.
By combining, Waste Management and Republic would realize approximately $150 million in cost savings, according to Waste Management.