Laidlaw finally cleans up
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March 16, 1998: 3:41 p.m. ET
Once-rebuffed suitor will buy Safety-Kleen Corp. in a $2 billion deal
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NEW YORK (CNNfn) - Waste recycler Safety-Kleen Corp. on Monday agreed to be bought by once-hostile suitor Laidlaw Environmental Services Corp. for a sweetened $2.1 billion offer, including stock, cash, and assumption of debt.
The board of Elgin, Ill.-based Safety-Kleen, running out of options after shareholders voted down a competing offer, said it had "unanimously recommended" they accept the new Laidlaw bid.
As part of the revised offer, Safety-Kleen shareholders will receive 2.8 Laidlaw shares and $18.30 in cash for each Safety-Kleen share.
Shares of Laidlaw Environmental (LLE) were off 1/16 at 4-31/6 while Safety-Kleen shares (SK) gained 3/4 at 28-3/8 in New York Stock Exchange trading.
Safety-Kleen spokeswoman Maureen Fisk said Laidlaw will assume $260 million in debt as part of the deal.
The deal signals a begrudging change of heart at the Safety Kleen board, which had sought a "white knight" suitor after Laidlaw first made a $1.5 billion bid last November.
But Safety-Kleen shareholders rebuffed a $1.58 billion offer from Philips Services Corp. of Canada, which the board had favored.
In the deal announced Monday, Safety-Kleen directors were afforded a chance to save face, thanks to the new Laidlaw offer -- 30 cents a share richer than the previous one.
"The board has achieved its goal of enhancing shareholder value and it is pleased that the terms of the offer with Laidlaw were improved," said Donald Brinckman, chairman and chief executive officer of Safety-Kleen.
BT Alex Brown analyst Cotton Swindell said he expects Laidlaw to cut costs - and possibly jobs - on the belief it can achieve about $100 million in savings through the takeover.
Consolidation is growing in the waste-recycling and trash-hauling business. Laidlaw Environmental rival USA Waste Services Inc. last week merged with Waste Management Inc. in a $13.7 billion deal.
Laidlaw, a unit of Toronto-based Laidlaw Inc., provides hazardous and industrial waste management services to both governments and industries.
Safety-Kleen is the nation's largest recycler of used lube oil and the world's largest cleaner of tools and parts, with about 400,000 industrial and automotive customers.
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