We'll have to wonder for a while whether Microsoft
The revised offer of $6.7 billion arrived early this week, about a month after Waste's initial $6.3 billion offer for Republic. That first offer itself followed Republic's own bid for Allied Waste
In its revised proposal, in order to demonstrate its determination to complete the deal, Waste proposed paying a $250 million fee if the deal is scuttled on the basis of Justice Department opposition (since a combined Waste Management/Republic Services would control nearly half the U.S. waste-hauling market). At the same time, the company has proposed a "ticking fee," which would increase the $37 per-share offer in the event that the deal is delayed by antitrust considerations.
Waste also emphasized that it has confirmed the financing for the deal, and said it now believes that the proposed combination would exceed its original $150 million estimate for cost synergies by 25% to 35%. It further believes that its "post-transaction financial profile" would permit the company to remain investment-grade and that the deal would add to earnings in the first year following closing.
Whatever happens, the waste industry seems destined for a big change. Its biggest company may be poised to become larger still. But something tells me that we may not have seen the final bid to buy up Republic.
Further Foolishness from the landfill:
Fool contributor David Lee Smith does not own any shares of companies mentioned in this article. Republic Services is an Income Investor recommendation, while Waste Management and Microsoft are Inside Value recommendations. The Motley Fool has a disclosure policy.