Laidlaw Can Make Safety-Kleen Bid
CHICAGO (AP) _ Laidlaw Environmental Services Inc. is moving ahead with its bid to take over recycler Safety-Kleen Corp. after a federal judge ruled it can go directly to shareholders with its $2.1 billion hostile takeover offer.
Late last month, Laidlaw sweetened its bid after Safety-Kleen’s board agreed to sell the company for $1.9 billion to SK Parent Corp., a new company founded by the Philip Services Corp. and the investment firms Apollo Advisors and the Blackstone Group. Safety-Kleen, to date, has not responded to the sweetened deal.
Laidlaw is offering $30 per share for the Elgin, Ill.-based oil and chemicals recycler. The bid includes $15 in cash per share and $15 of Laidlaw stock, as well as assumption of $249 million in debt. The cash portion will be reduced by breakup fees or new severance agreements with Safety-Kleen executives, Laidlaw has said.
The Philip Services group is offering $27 a share in cash, a deal that analysts said might prove more attractive to shareholders because it is all cash.
While Safety-Kleen’s board already has approved the SK Parent buyout, the company said it ``continues to consider″ Laidlaw’s proposal. But in a statement, Safety-Kleen appeared to have concerns about the offer, including the ``question of the value of its proposed combination of stock and cash.″
Safety-Kleen spokeswoman Maureen Fisk called the Laidlaw ruling ``just one step in the process″ and said the board continues to review its options.
Laidlaw spokesman T.A.G. Wilson said the Columbia, S.C.-based company first must get shareholder approval to allow it to solicit shares exceeding 20 percent ownership. By law, companies holding more than that are limited to only 10 percent voting power unless shareholders decide otherwise. A meeting on that matter has not been scheduled, Watson said.
Laidlaw’s lawsuit also seeks to prevent Safety-Kleen from having to pay as much as $75 million in fees that could come due if the company does not accept Hamilton, Ontario-based Philip Services’ bid. A hearing on that was set for Jan. 6
In an earlier lawsuit, Safety-Kleen alleged Laidlaw broke securities laws by prematurely calling a meeting of its shareholders to consider the issue.
Laidlaw Environmental was formed earlier this year when it separated from its parent company, Laidlaw Inc. It then merged with a former competitor, Rollins Environmental Services Inc. The new company dominates the hazardous waste industry in North America.
In recent years, the industry has been troubled by too much capacity and stiff pricing competition. Laidlaw intends to be an industry consolidator, reducing the number of facilities through acquisitions and cost-cutting.
After merging with Rollins, Laidlaw Environmental reduced the combined company’s plants from 134 to 100 and trimmed the payrolls from 5,500 to 4,500 workers.
Safety-Kleen’s stock rose 6 cents to $27.81 1/4 on the New York Stock Exchange. Laidlaw’s stock was unchanged at $4.31 1/4 a share.