Gates investment arm trashes Waste Management bid

By Duncan Martell

SAN FRANCISCO (Reuters) - Bill Gates's investment arm has waded into a brewing takeover battle between Waste Management Inc WMI.N and Republic Services Inc (RSG.N), asking Waste Management to walk away.

Just over a month after he left Microsoft Corp (MSFT.O), Gates's BGI is lobbying the largest U.S. trash hauler to drop the unsolicited $6.2 billion bid it made this month for Republic, the third largest.

While his investment vehicles have stakes in dozens of companies, they have kept low profiles over the years and Gates has not traditionally been known as an activist investor.

But BGI didn't mince words in its letter to Waste Management's CEO and board, disclosed on Thursday.

"We can only assume your ill-timed and poorly conceived pursuit of Republic is designed to disrupt what you perceive as a competitive threat to your position in the market," wrote BGI.

"An acquisition of Republic will most certainly burden the company with excessive debt, distract your management, result in significant regulatory burdens, and thereby reduce shareholder value," it said.

"We encourage you to act with the best interests of your shareholders in mind, in a responsible and prudent manner, and to abandon this acquisition."

But Waste Management maintained that its bid for Republic was in the best interest of both companies and its stockholders.