Republic again rejects Waste Management

Houston-based Waste Management (NYSE: WMI) said today it was disappointed that Ft. Lauderdale, Fla., rival Republic Services (NYSE: RSG) turned down its second takeover offer.

Waste Management's $37 per share cash bid, up from $34, was the company's latest bid to block Republic's plans to acquire Phoenix-based Allied Waste Industries (NYSE: AW), which would combine the No. 2 and No. 3 trash haulers in the country (see Waste Management tries again for Republic).

“We continue to believe that our revised proposal would provide superior value to Republic stockholders and, with Republic's cooperation, would be executable on a timely basis," said Waste Management in a statement.

Republic announced its merger with Allied Waste in June, prompting Waste Management, the No. 1 waste and environmental services firm in the country, to try to block the deal.

Republic has continued to say it's committed to a transaction with Allied Waste, and last month Republic's board adopted a poison pill to block any attempts at a hostile takeover (see Waste Management still gunning for Republic).

Waste Management added a $250 million break-up fee to its second attempt for Republic, and also said it would pay interest on its $37 per share offer if the deal fails to close by a set date due to antitrust clearance delays.

But in a letter to Waste Management, James O'Connor, chairman and CEO of Republic, still turned down the revised deal. "The board is unanimously of the view that the revised Waste Management proposal still substantially undervalues Republic."

"Republic is not for sale, and financial analyses described in our proxy statement support an independent standalone valuation of the merged company substantially above $37 per share," said O'Connor.

"Based upon our contacts with shareholders, our board believes that Republic shareholders would not want that potential value sold on the cheap."

Waste Management said it will evaluate its options.

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