Waste Management drops Republic bid

Citing the weak financial markets, Waste Management Inc. on Monday backed out of an attempt to buy a Florida company and stop it from buying Phoenix-based Allied Waste Industries Inc.

This clears the way for Ft. Lauderdale-based Republic Services Inc., the country's third largest garbage hauler, to proceed with its $6 billion purchase of and merger with Allied, the second largest hauler. Closing is expected in December.

Just three weeks after the Republic-Allied deal was announced in June, Waste Management, the No. 1 hauler, announced it was making an unsolicited bid to buy Republic and not Allied. But on Monday the company announced that it would not be prudent to continue with the $6.73 billion acquisition “given the current state of the financial markets.”

Will Flower, a Republic spokesman, said the company was fortunate in that it lined up all the credit it needed to buy Allied well before the credit freeze. On Sept. 23 Republic announced it had secured $1.75 billion in unsecured revolving credit through Bank of America Securities LLC and JP Morgan Securities and that was the last financing it needed.

“So we're all set. We have been for about three weeks,” he said. “I think it's due to the very solid balance sheet that Republic has as well as our good timing. We began this process early on. And we got through the credit markets well before the current meltdown.”

All three companies saw their stock rise Monday in a broad rally. Shares of Allied rose by the largest percent, 24.59 percent, or $2.10 to $10.64. Waste Management shares rose $4.63 or 17.97 percent to $30.39. And Republic shares rose $2, or 8.89 percent, to $24.50.