Waste Management boosts offer for Republic Services to $37 per share

By Lisa Kerner

Charlotte, N.C., Aug. 11 - Waste Management, Inc. increased its bid for Republic Services, Inc. to $37 per share from its original July 14 offer of $34 per share.

According to Waste Management, this latest proposal "provides the certainty of an all-cash transaction that is within the range of value determined by Republic Services' own financial advisor for its pending transaction with Allied Waste Industries, Inc."

Waste Management said the revised proposal addresses concerns raised by Republic Services' board, by offering to:

• Pay Republic Services a fee of $250 million if the parties are unable to close a transaction due to opposition from the U.S. Department of Justice; and

• Include a "ticking fee," increasing the $37.00-per-share price by an interest component, in the event its proposed transaction does not close on or before a mutually acceptable date due to antitrust clearance delays.

Waste Management also confirmed that financing for the transaction is available, a company news release noted.

Republic's board, along with its financial and legal advisers, will review the revised proposal, Republic said in its statement.

Allied Waste, in response to news of the offer, accused Waste Management of attempting to disrupt its proposed merger with Republic.

"The revised offer of $37 per share remains inferior to the range of values supporting the merger of Republic and Allied Waste, especially after recognizing that no consideration has been given for a control premium," Allied Waste chairman and chief executive officer John J. Zillmer said in a company statement.

"Even at this inferior price, Waste Management still does not have committed financing, but rather hopes to get by with vague references to the idea that 'financing is available,'" Zillmer added.

Zillmer also pointed out that Waste Management has not removed its condition that maintaining its investment-grade status is a prerequisite to a Republic transaction.

"We are committed to not allowing Waste Management to distract Allied Waste from supporting the merger and integration of Republic and Allied for the benefit of our two companies' shareholders, employees and customers," the Allied release said.

It was previously reported that Republic Services granted a request by Bill Gates' Cascade Investment, LLC to waive section 203 of the Delaware General Corporation Law regarding the acquisition of up to 20% of Republic's outstanding shares.

Bill and Melinda Gates oppose Waste Management's offer, which was rejected by Republic Services in favor of its June 23 agreement to be acquired by Allied Waste.

Through Cascade Investment and the Bill & Melinda Gates Foundation Trust, the investors own 28,542,451 shares, or 15.69%, of Republic Services. They also own 2.3% of Waste Management, it was reported in an earlier Securities and Exchange Commission filing.

Republic Services, based in Fort Lauderdale, Fla., provides environmental services including solid waste collection, transfer and disposal services. Allied Waste is a non-hazardous solid waste services company located in Phoenix.

Waste Management is a Houston-based provider of integrated waste services.

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