DOW JONES NEWSWIRES

BGI, the investment office that manages the assets of Microsoft Corp. (MSFT) founder Bill Gates, urged market leader Waste Management Inc. (WMI) to abandon its proposed merger with rival Republic Services Inc. (RSG).

BGI noted that Cascade Investment LLC and the Bill & Melinda Gates Foundation Trust are long-term shareholders of Waste Management, holding in total about 2.3% of the company. Cascade is owned by Gates, and the Gates trust manages the assets that fund the Bill & Melinda Gates Foundation.

In a letter to Waste Management's chief executive and board, BGI said, "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."

BGI said it believes the company's shareholders and competitive position would be better protected without a merger. "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."

Before Waste Management's bid for Republic, that No. 3 trash hauler had launched its own $6.24 billion bid to acquire Allied Waste Industries Inc. (AW), the No. 2 garbage hauler. Waste Management said last week it is seeking antitrust approval to allow it to buy a stake of greater than 1% in Republic. Republic rebuffed Waste Management's requests to enter negotiations and enacted a poison pill to thwart the No. 1 garbage hauler's potential takeover plans.

Waste Management's shares closed Thursday at $35.54, down 0.7%, while Republic's closed up 0.5% at $32.50. There was no after-hours trading. Allied's shares closed up 3.2% at $12.10, a day after the company reported a 22% increase in second-quarter net income.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com

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  (END) Dow Jones Newswires
  07-31-08 1906ET
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