WILMINGTON, DEL. (CN) – Republic Services is cheating shareholders by merging with Allied Waste Industries and refusing to consider Waste Management’s superior offer, Republic shareholders say in a class action. They say Republic will dilute their holdings by issuing 192 million shares, more than doubling its number of shares.
Republic has 182 million shares outstanding, according to the complaint in Chancery Court.
Republic’s pre-announcement price was $33.66 a share; Allied shares traded at $13.92. The complaint states, without explanation, that this made “the implied transaction price per share worth $15.15” – or $2.8 billion.
Allied is the nation’s second biggest trash company.
Republic’s shareholders want the merger enjoined.