Monday, October 20, 2008

Waste Management Drops Bid for Republic Services

Waste Management could have borrowed enough money to make the $6.7 billion deal for rival Republic Services, but lenders wouldn't lock in interest rates, so the Houston-based trash hauler walked away, CEO David Steiner said.

Waste Management's announcement ended several months of efforts by the country's largest trash hauler to buy the third-largest. Fort Lauderdale, Fla.-based Republic repeatedly shot down Waste Management's offers, saying it preferred to go ahead with a deal to merge with No. 2 Allied Waste Systems, based in Phoenix.

Analysts had viewed Waste Management's takeover attempt as an effort to derail the Allied-Republic deal.

Steiner has said his company had not planned to make a bid for either rival but did so only after they put themselves in play by announcing their merger. Because it wasn't a "must-have," Steiner said Monday that it was easy to walk away.

Standard & Poor's equity analyst Stewart Scharf said Waste Management is better off dropping the deal than pursuing risky financing.

"It's just not the best time to be pursuing a large acquisition," he said.

Waste Management could still benefit from the $6.1 billion Allied-Republic merger, as those companies may be forced to sell some assets to avoid antitrust problems, Scharf said. The Justice Department is still reviewing the deal, Republic spokesman Will Flower said.

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