GreenYes Digest V98 #129

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GreenYes Digest Sat, 6 Jun 98 Volume 98 : Issue 129

Today's Topics:
Allied Takeover of BFI

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Date: Fri, 5 Jun 1998 10:14:03 -0500
From: "RecycleWorlds" <>
Subject: Allied Takeover of BFI

Today's Wall Street Journal reports that Allied Waste Industries
has made a merger offer to effectively takeover BFI.

USA Waste at least had 45% of Waste Management's market
capitalization. Allied only has 21% of BFI's valuation (and 15% of its

Minnows only swallow whales if they've got a whole lot of
underlying financial backing behind them. The WSJ article suggests
that here this comes from the Bass Bros. who also have a newly
acquired 2.2 million share stake in BFI so that they can back the
acquirer on one hand, while they goose the acquiree on the other.

I.e. the inference is that while BFI's Bruce Ranck may not be
excessively eager to be shown the door, stockholders will give him
little alternative if the takeover price is right.

Assuming that Allied can show a proforma earnings projection for
the combined company to sustain its price/earnings ratio -- after
paying a large enough premium over current stock price for BFI's
existing stockholder to boot out current management -- the deal would
go through.

Presumably, Allied would not have made the play without being
poised to follow it through and having got tacit sign off from the
financial analysts. But, at this writing, BFI's strategy for a
counterattack, if there is to be one, has not yet surfaced.

Peter Anderson
RecycleWorlds Consulting
4513 Vernon Blvd. Ste. 15
Madison, WI 53705-4964
Phone:(608) 231-1100/Fax: (608) 233-0011


End of GreenYes Digest V98 #129