Waste Management ends bid for Republic

Archiv – The USA’s leading refuse haulier Waste Management Inc. (WMI) has withdrawn its US$ 6.73 billion bid to acquire rival Republic Services, saying the move would not be prudent given current financial market turmoil.United States | The USA’s leading refuse haulier Waste Management Inc. (WMI) has withdrawn its US$ 6.73 billion bid to acquire rival Republic Services, saying the move would not be prudent given current financial market turmoil.
The announcement ends WMI’s three-month battle to take over the nation’s third biggest refuse company – a move which had been seen as an effort to derail an earlier deal agreed between Republic Services and Allied Waste Industries Inc., the second-largest player in the US industry.
Waste Management says it is not prepared to put at risk its strong financial position to engineer a hostile takeover. Chief Executive Officer David Steiner has said in an interview: ’Quite frankly, it came down to the credit markets. We’re certainly not willing to pick up assets at any price or if we believe it would create undue risks to our business model.’
In August, WMI raised its buy-out offer to US$ 37 per share after Republic swiftly rejected a US$ 34 bid the previous month, saying it undervalued the company and was an attempt to disrupt its own acquisition plans. The US$ 6.73 billion offer represented a premium of almost 33% when set against Republic’s closing stock price on July 11 – the last trading day before Waste Management announced its initial offer. At the time, Republic said it believed its proposed link-up with Allied offered more value and certainty for shareholders.
According to Will Flower, spokesman for Florida-based Republic, his own company and Allied are moving along with plans to combine their operations. The companies expect to close the deal in mid-December. ’The announcement today from Waste Management clearly takes another obstacle out of the way,’ he adds.