Waste Management dumps on a few dollars more; ImClone, Bristol-Myers squabble; JDS to join i2

By Aaron Hochman-Zimmerman

New York, Aug. 11 - Waste Management Inc. added another $3 per share to its offer for Republic Services Inc. which many feel is a merger designed more to separate two companies than to connect two companies.

If the planned merger between Republic and Allied Waste Industries Inc. were allowed to run to completion, the new entity would overshadow Waste Management as the largest garbage removal firm in the country.

Elsewhere, in pharmaceuticals Bristol-Myers-Squibb Co. and ImClone Systems Inc. are both claiming the rights to the highly anticipated cancer fighter Erbitux.

Bristol-Myers already owns 13% of ImClone and has placed a $60 per share offer to own the remaining 83%, although many expect to see a higher offer price.

Also in technology, JDS Software Group Inc. placed a bid to acquire fellow supply chain managers i2 Technologies Inc. for $14.85 per share.

Meanwhile, after Friday's rally the Dow Jones Industrial Average kept itself on the positive side by ending up by 48.03, or 0.41%, at 11,782.35, while the Nasdaq Composite Index added 25.85, or 1.07%, to finish at 2,439.95.

The S&P 500 tacked on 9.00, or 0.69%, to close at 1,305.31.

Shot fired in haulers standoff

Waste Management upped its offer for Republic Services to $37 per share from $34 per share on Monday.

The country's largest hauler, Waste Management has been in a three-way standoff with Republic Services and its potential target Allied Waste, the second and third largest haulers.

"Our $37 all-cash proposal clearly offers Republic stockholders a better and more certain value alternative than is contemplated in the Republic-Allied transaction," said David Steiner, Waste Management's chief executive officer in a press release.

Many consider the new offer too small to shake the merger between Republic and Allied; an analyst said, "the whole thing is problematic."

The prevailing wisdom is that the lowest bid possible bid from Waste Management which might clean up the mess between the three companies is $40 per share for Republic, he said.

"I don't know of any reason to contradict that," he added,

However, "Waste Management doesn't seem to have the wherewithal to do that," he said about a $40 per share offer.

"Waste Management is a highly leveraged company," he said.

Even if Republic shows interest in $37 per share, Waste Management "has more long-term debt than shareholder equity" and "the higher you go, the lower the return on investment," he said.

The deal between Republic and Allied came at a bad time for Waste Management, the analyst said and finally led to the ill-conceived attempt to wedge the two apart.

"They didn't even think of doing this until Republic tried to get Allied," he said and

"It's almost like [Waste Management] is playing a game, but surprises do happen," he said.

Shares of Waste Management (NYSE: WMI) took on $0.10, or 0.28%, to $36.11.

Shares of Republic Services (NYSE: RSG) added $0.19, or 0.55%, to $35.05.

Shares of Allied Waste (NYSE: AW) piled on $0.19, or 1.41%, to $13.68.

Drug wars

ImClone and its big cousin Bristol-Myers Squibb found themselves wrangling over the rights to Erbitux, the cancer fighting drug which is at the center of their proposed $4.5 billion merger.

The Wall Street Journal was the first to report the new development which comes amid a standing $60 per share offer from Bristol-Myers.

Many believe the offer price will make its way higher as the deal progresses.

Some suggested that Bristol-Myers should spend its energy acquiring all of ImClone and therefore Erbitux, rather than fight for a piece and eat the whole pie anyway.

Still, many in the market were left to wonder what may come of the mid-deal skirmish.

If Erbitux changes hands the dynamics of the deal regarding price, other offers or the deal's reason for being may be called into question.

Shares of ImClone (Nasdaq: IMCL) inched up by $0.15, or 0.23%, to close the day at $64.09.

Shares of Bristol-Myers-Squibb (Nasdaq: BMY) were also slightly better by $0.13, or 0.58%, to finish the session at $22.44.

JDA Software and i2 together

i2 Technologies signed an agreement to be acquired by JDA Software for $14.85 per share or $346 million in cash.

The offer to combine the two supply chain software developers is at a 5% premium to Friday's close.

"By acquiring i2 we double our addressable market in manufacturing to include discrete manufacturing, complementing our current market leadership in process manufacturing and strengthening our retail and transportation management presence," said JDA's chief executive officer Hamish Brewer in a statement.

"A major player in the supply chain space for more than 20 years, i2's world-class customers and employees are the perfect match for JDA," Brewer added.

Certain of JDA's directors "significant shareholders" have already agreed themselves to support the merger as well as oppose any other attempts by other players, a market source said.

Shares of i2 Technologies (Nasdaq: ITWO) improved by $0.06, or 0.42%, to end at $14.22.

Shares of JDA Software (Nasdaq: JDAS) were better by $0.83, or 4.63%, to finish at $18.74.

The deal is expected to close in the fourth quarter of 2008.

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