Bill Gates Likes The Smell Of Trash

It looks like Bill Gates is folding up his sleeves and moving into trash.

Gates’ Cascade Investment took an 11.6% stake in Republic Services, according to a filing with the U.S. Securities and Exchange Commission. Gates' private investment fund bought 3.9 million shares of Republic from Jan. 13 through Jan. 26 for $448.6 million

With a market capitalization of $4.8 billion, Republic and its larger rival, the $15.7 billion Waste Management now control the U.S. trash sector. Republic just completed a $6.1 billion, all-stock buyout of former rival, Allied Waste Industries. Before the deal, Gates owned 20.0% of Republic, so he’s not new to the investment.

The founder of Microsoft is also no stranger to companies with strangleholds on their markets.

Hoffman said the Republic and Waste Management own 573 of America's 600 landfills, meaning they can sustain – and raise – prices without losing business. “If you control the ultimate disposal, you can’t gouge the marketplace but you can raise prices above inflation,” he said.

Republic rejects Waste Management's unsolicited bid

The trash talking has begun which could reduce the number of haulers in the metro area.

Hauler Republic Services Inc. has rejected an unsolicited $6.19 billion cash offer from larger rival Waste Management Inc.

Republic, the nation's third-largest waste collector, instead wants to stick with its own deal announced last month to buy No. 2 Allied Waste Industries Inc., which serves some municipalities in the St. Louis metro area. The all-stock agreement was worth about $6.07 billion at the time.

The investment office that manages the assets of the Bill & Melinda Gates Foundation Trust disagreed with the deal. BGI owns 15.6 percent of Republic and 2.3 percent of Waste Management. That office also thinks the deal undervalues the target company, lacks strategic rationale and believes the regulatory process will be arduous and risky.

Waste Management Offers to Buy Republic Services Who Just Purchased Allied Waste

Waste Management 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 up against the nation's largest garbage hauler.

The move countered a deal announced in June in which the third-largest waste hauler, Republic, said it would buy Allied Waste Industries, the second-largest, in a stock combination worth $6.07 billion at the time.

Waste Management's $34-per-share offer represented a 22 percent premium to Republic Services closing stock price of $27.90 on Friday.

Allied Waste Sold to Republic Services

Republic Services agreed to acquire Allied Waste Industries in a $6.24 billion deal that would combine the nation’s second- and third-largest trash haulers, creating a formidable rival to market leader Waste Management. [WSJ].

St. Louis County selected Allied Waste Industries as their designated hauler for trash districts 5 and 6. Even before the program gets started, one company withdrew their proposal while another was sold. In addition, three other trash haulers filed a law suit against the county stating the county voilated their own charter along with a state regulation.

Complaints on services of IESI, another county selected hauler, are listed at: http://www.insiderpages.com/b/3716757864

Questions now are if Republic Services will be in a position to honor the rates bid by Allied Waste or withdraw.