Republic, ADT call off deal

September 30, 1996: 7:48 p.m. ET

$4.3 billion merger derailed in part by lack of shareholder support
From Correspondent Sean Callebs

NEW YORK (CNNfn) - Republic Industries and ADT Ltd. surprised Wall Street Monday by announcing their proposed $4.3 billion merger would not go through.
     The two companies seemed like a perfect fit just three months ago -- ADT is the largest electronic security firm in North America while Republic has gone on an acquisition tear over the last year that netted it19 security firms. In the end, however, wildly fluctuating stock prices along with lack of shareholder support proved enough to derail the deal, which was originally valued at $5 billion.
     Analysts say a Kansas utility company, ADT's largest shareholder, was spooked by the declining value of the deal and indicated it would not support it.
     "We saw Republic stock fall from $29 down to $19 and work back up to $29. But you didn't know where Republic stock was going to end up when this deal was finished," said Jeffrey Kessler, senior vice president of Lehman Brothers.
     The decision to abandon the deal was a mutual one after both sides determined they could not agree on a price guarantee.
     Analysts said the deal could have benefited both companies, but it would also have brought together two strong-minded deal makers.
     ADT became the largest security system company under the leadership of Michael Ashcroft. Wayne Huizenga, the man behind Republic, owns three South Florida sports franchises and has been on a buying binge of late. In addition to security, Huizenga's company is also involved in solid waste disposal, and used car sales.
     Mari Bari, vice president of Deutsche Morgan and Grenfell, said Huizenga didn't like the fact that the deal was taking so long. He said that was more than likely the main point of frustration that ended up derailing the deal. (165K WAV) or (165K AIFF)
     Republic wants to develop a used car superstore business, although now it will have to find another firm to recondition its cars.
     As for ADT, analysts say it's been growing at a solid level over the last five years. But the alarm industry is changing quickly because of new technology and increasingly fierce competition.
     Analysts say ADT will likely resume its hunt for a merger partner. They say there's a good chance the company will find one in the end.