August 11, 2008

2 Min Read
Waste Management Increases Republic Offer

Houston-based Waste Management has increased its all-cash offer to acquire all of the outstanding shares of Republic Services, Fort Lauderdale, Fla., to $37 per share. The price represents a premium of 33 percent on the stock’s closing price as of July 11.

“Our $37 all-cash proposal clearly offers Republic stockholders a better and more certain value alternative than is contemplated in the Republic-Allied transaction,” said David Steiner, CEO of Waste Management, in a press release. “We believe our proposal is clearly superior for Republic’s stockholders and is designed so we can work cooperatively with Republic to structure a transaction that would benefit both Republic and Waste Management stockholders.”

Republic has responded to the new offer by releasing the following statement: "Consistent with its fiduciary duties, the board of directors of Republic Services, along with its legal and financial advisors, will carefully review the revised proposal received from Waste Management. The board will respond following its review."

The new offer includes a clause that would pay Republic a fee of $250 million if the deal is not approved by the U.S. Department of Justice. It also includes a ticking fee that would add interest to the new price if the proposal does not close on a mutually agreed-upon date due to antitrust delays.

The initial, unsolicited offer of $34 per share, which was made July 14, was rejected days later. Waste Management later filed for federal approval to buy Republic’s shares and therefore continue its efforts to acquire the firm, which prompted Republic to adopt a plan commonly referred to as a poison pill to hold off an anticipated hostile takeover attempt. 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.

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