Disposal leader bids for Republic

Waste Management Inc. on Monday made an unsolicited offer to buy disposal company Republic Services Inc. for $6.19 billion in cash, aiming to block its biggest rivals from teaming against the nation’s largest garbage hauler.

The deal represented a counteroffer to Republic’s planned acquisition of Allied Waste Industries Inc. that was announced in late June. Republic agreed to pay Allied Waste shareholders 0.45 of a Republic share for each Allied share they held.

The stock deal between No. 2 Republic Services and No. 3 Allied Waste Industries was worth $6.07 billion at the time.

“Our proposal clearly offers a better and more certain value alternative to Republic stockholders than the recently announced Republic-Allied Waste transaction,” Waste Management Chief Executive David P. Steiner said.

Republic said its board of directors would review the $34-a-share offer from Waste Management and respond “in due course.”

The per-share offer represents a 22% premium to Fort Lauderdale, Fla.-based Republic Services’ closing price of $27.90 on Friday.

Shares of Waste Management fell $2.12, or 5.8%, to $34.49 on Monday. Republic Services shares rose $3.86, or nearly 13.8%, to $31.76.

An Allied Waste spokesman in Phoenix did not comment specifically on Waste Management’s bid for Republic Services. In a statement, he said Republic’s proposed stock deal for Allied creates “significant long-term value for the shareholders of both companies.”

If the deal ultimately goes through, Waste Management’s share of the industry would rise to 30% from 24% now, said Stewart Scharf, an equity analyst at Standard & Poor’s in New York.