Waste Management offers $6.2 bln to buy Republic

By Helen Chernikoff

NEW YORK (Reuters) - Waste Management Inc WMI.N on Monday offered to buy Republic Services Inc (RSG.N) for about $6.19 billion, potentially derailing the smaller competitor's deal to acquire Allied Waste Industries Inc AW.N.

Republic said in a statement that it would carefully review the proposal and respond in due course, but the company noted that it already had a definitive merger agreement with Allied Waste.

At $34 per share, Waste Management's bid represents a 22 percent premium over Republic's closing price on Friday. Republic shares rose nearly 13 percent, while Waste Management and Allied Waste fell.

The proposal came as a response to Republic's agreement in June to buy Allied Waste for $6 billion, Waste Management Chief Executive David Steiner told Reuters in an interview.

"As soon as we saw the announcement, we realized both Republic and Allied had been put into play, so we started to look at it," he said.

Republic shares had been off 17 percent since word leaked of the company's plan to bid for Allied, which created the opening Waste Management needed to offer a competing proposal, JPMorgan analyst Scott Levine wrote in a note to clients.

Republic's strong business in Las Vegas is an especially compelling asset, said Steiner, who said Waste Management hadn't yet started to figure out how many landfills the combined company would have.

"While we know there are certain assets we may need to divest, we're also certain the assets we'll get to keep are significant and make for a compelling transaction," Steiner said during a conference call.