As filed with the Securities and Exchange Commission on October 2, 2008

Registration No. 333-152693

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2 to

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Republic Services, Inc.

(Exact name of registrant as specified in its charter)

 

110 S.E. 6^thStreet, 28^th Floor

Fort Lauderdale, Florida 33301

(954) 769-2400

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

David A. Barclay, Esq.

Senior Vice President, General Counsel

and Assistant Secretary

Republic Services, Inc.

110 S.E. 6^th Street, 28^th Floor

Fort Lauderdale, Florida 33301

(954) 769-2400

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

 

Copies to:

 

 

Approximate date of commencement of proposed sale to the public:   As soon as practicable after the effective time of this registration statement and the effective time of the merger of RS Merger Wedge, Inc., a Delaware corporation and a wholly owned subsidiary of Republic Services, Inc., with and into Allied Waste Industries, Inc., a Delaware corporation, as described in the Agreement and Plan of Merger, dated as of June 22, 2008, as amended, attached as Annex A to the joint proxy statement/prospectus forming part of this registration statement.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

SUBJECT TO COMPLETION, DATED OCTOBER 2, 2008

 

 

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

 

The boards of directors of Republic Services, Inc. and Allied Waste Industries, Inc. have each approved a merger agreement which provides for the combination of the two companies. The boards of directors of Republic and Allied believe that the combination of the two companies will be able to create substantially more long-term stockholder value than either company could individually achieve. Following the completion of the merger, Allied will be a wholly owned subsidiary of Republic with Allied stockholders receiving approximately 51.7% of the outstanding common stock of the combined company in respect of their Allied shares and Republic stockholders retaining approximately 48.3% of the outstanding common stock of the combined company, in each case, on a diluted basis. In this joint proxy statement/prospectus, Republic Services, Inc. is referred to as “Republic” and Allied Waste Industries, Inc. is referred to as “Allied.”

 

The combined company will be named Republic Services, Inc. and the shares of the combined company will be traded on the New York Stock Exchange, or the NYSE, under the symbol “RSG.”

 

If the merger is completed, Allied stockholders will be entitled to receive .45 shares of Republic common stock, par value $.01 per share, for each share of Allied common stock that they owned immediately before the effective time of the merger. Allied stockholders will be entitled to receive cash for any fractional shares that they would otherwise have received pursuant to the merger. Republic stockholders will continue to own their existing shares after the merger. Republic common stock is traded on the NYSE under the symbol “RSG.” On [          ], 2008, the closing price per share of Republic common stock as reported by the NYSE was $[     ]. You are urged to obtain current market quotations for the shares of Republic and Allied.

 

Republic and Allied estimate that Republic will issue approximately 196.2 million shares of Republic common stock pursuant to the merger based on the number of shares of Allied common stock outstanding on June 30, 2008, and will reserve an additional 14.1 million shares of Republic common stock for issuance in connection with the exercise or conversion of Allied’s outstanding options, other equity-based awards and convertible debentures.

 

YOUR VOTE IS IMPORTANT. The merger cannot be completed unless holders of Republic common stock vote to approve the issuance of Republic common stock and other securities convertible into or exercisable for shares of Republic common stock, which we refer to as the Republic share issuance, in connection with the merger, and holders of Allied common stock vote to adopt the merger agreement, as amended on July 31, 2008, which is referred to as the merger agreement.

 

The Republic board of directors unanimously recommends that Republic stockholders vote “FOR” the Republic share issuance in connection with the merger. The Allied board of directors unanimously recommends that Allied stockholders vote “FOR” the adoption of the merger agreement.

 

Republic and Allied will each hold a special meeting of their respective stockholders to vote on these proposals. Whether or not you plan to attend your company’s special meeting, please take the time to cause your shares to be voted by completing and mailing the enclosed proxy card or submitting your proxy by telephone or through the Internet, using the procedures in the proxy voting instructions included with your proxy card. Even if you return the proxy, you may attend the special meeting and vote your shares in person at the meeting.

 

This document describes the proposed merger and related transactions in more detail. Republic and Allied encourage you to read this entire document carefully, including the merger agreement, as amended, which is included as Annex A, and the section discussing “Risk Factors” relating to the merger and the combined company beginning on page 29.

 

Republic and Allied look forward to the successful combination of the two companies.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger described in this joint proxy statement/prospectus or the Republic common stock to be issued pursuant to the merger, or determined if this joint proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

 

This joint proxy statement/prospectus is dated [          ], 2008 and, together with the accompanying proxy card, is first being mailed or otherwise delivered to stockholders of Republic and Allied on or about [          ], 2008.

 

THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES ADDITIONAL INFORMATION

 

This document incorporates by reference important business and financial information about Republic and Allied from other documents filed with the Securities and Exchange Commission, which is referred to as the SEC, that are not included in or delivered with this joint proxy statement/prospectus. This information is available to you without charge upon your written or oral request. For a list of the documents incorporated by reference into this joint proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 158. You can obtain electronic or hardcopy versions of the documents that are incorporated by reference into this joint proxy statement/prospectus, without charge, from the Investor Relations section of the appropriate company’s website or by requesting them in writing or by telephone, in each case as set forth below:

 

 

IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY [          ], 2008 IN ORDER TO RECEIVE THEM BEFORE YOUR COMPANY’S SPECIAL MEETING.

 

SUBMITTING A PROXY ELECTRONICALLY, BY TELEPHONE OR BY MAIL

 

Republic stockholders of record on [          ], 2008 may submit their proxies as follows:

 

 

Allied stockholders of record on [          ], 2008 may submit their proxies as follows:

 

 

If you are a beneficial owner, please refer to your proxy card or the information forwarded by your bank, broker or other holder of record to see which options are available to you.

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On [          ], 2008

 

Dear Republic Stockholder:

 

Republic Services, Inc. is pleased to invite you to attend a special meeting of the stockholders of Republic, which will be held on [          ], 2008 at [     ] a.m., Eastern time, at [     ].

 

The purpose of the Republic special meeting is to consider and to vote upon the following proposals:

 

 

The Republic board of directors has unanimously determined that the Republic share issuance in connection with the merger is advisable and in the best interests of Republic and its stockholders and recommends that Republic stockholders vote “FOR” the Republic share issuance in connection with the merger and “FOR” the adjournment of the Republic special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

 

Republic and Allied cannot complete the merger unless the Republic share issuance in connection with the merger is approved:

 

(1) under the rules of the New York Stock Exchange, which requires the affirmative vote of holders of shares of Republic common stock representing a majority of votes cast on the proposal, provided that the total number of votes cast on the proposal represents a majority of the total number of shares of Republic common stock issued and outstanding on the record date for the Republic special meeting; and

 

(2) under the Republic bylaws, which requires the affirmative vote of holders of shares of Republic common stock representing a majority of the total number of shares of Republic common stock present, in person or by proxy at the special meeting, and entitled to vote on the proposal.

 

Your vote is very important. Your failure to vote will make it more difficult to approve the Republic share issuance.

 

The close of business on [          ], 2008 has been fixed as the record date, which is referred to as the Republic record date. Only holders of record of Republic common stock on the Republic record date are entitled to notice of, and to vote at, the Republic special meeting or any adjournments or postponements of the Republic special meeting. A list of the holders of Republic common stock entitled to vote at the Republic special meeting will be available for examination by any Republic stockholder, for any purpose germane to the Republic special meeting, at Republic’s principal executive offices at 110 S.E. 6th Street, 28th Floor, Fort Lauderdale, Florida 33301, for ten days before the Republic special meeting, during normal business hours, and at the time and place of the Republic special meeting as required by law.

 

Republic directs your attention to the joint proxy statement/prospectus accompanying this notice for a more complete statement regarding the matters proposed to be acted upon at the Republic special meeting. You are encouraged to read the entire joint proxy statement/prospectus carefully, including the merger agreement, as amended, which is included as Annex A to the joint proxy statement/prospectus, and the section discussing “Risk Factors” beginning on page 29.

 

SO THAT YOUR SHARES WILL BE REPRESENTED WHETHER OR NOT YOU ATTEND THE REPUBLIC SPECIAL MEETING, PLEASE SUBMIT A PROXY AS SOON AS POSSIBLE BY MAIL, BY TELEPHONE OR THROUGH THE INTERNET. INSTRUCTIONS ON THESE DIFFERENT WAYS TO SUBMIT YOUR PROXY ARE FOUND ON THE ENCLOSED PROXY FORM. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE REPUBLIC SPECIAL MEETING. REMEMBER, YOUR VOTE IS IMPORTANT, SO PLEASE ACT TODAY!

 

By Order of the Board of Directors,

 

 

James E. O’Connor

Chairman of the Board of Directors and Chief

Executive Officer

 

[          ], 2008

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

 

To Be Held On [          ], 2008

 

Dear Allied Stockholder:

 

Allied Waste Industries, Inc. is pleased to invite you to attend a special meeting of the stockholders of Allied which will be held on [          ], 2008 at [           a.m., Mountain time, at           ].

 

The purpose of the Allied special meeting is to consider and to vote upon the following proposals:

 

 

The Allied board of directors has unanimously determined that the merger agreement and the transactions contemplated by it, including the merger, are advisable and in the best interests of Allied and its stockholders and recommends that Allied stockholders vote “FOR” the adoption of the merger agreement and “FOR” the adjournment of the Allied special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

 

Republic and Allied cannot complete the merger unless the proposal to adopt the merger agreement is approved by holders of a majority of the total number of shares of Allied common stock issued and outstanding on the record date for the Allied special meeting.

 

Your vote is very important. Your failure to vote will have the same effect as a vote against the adoption of the merger agreement.

 

The close of business on [          ], 2008 has been fixed as the record date, which is referred to as the Allied record date. Only holders of record of Allied common stock on the Allied record date are entitled to notice of, and to vote at, the Allied special meeting or any adjournments or postponements of the Allied special meeting. A list of holders of Allied common stock entitled to vote at the Allied special meeting will be available for examination by any Allied stockholder for any purpose germane to the Allied special meeting, at Allied’s principal executive offices at 18500 North Allied Way, Phoenix, Arizona 85054, for ten days before the Allied special meeting, during normal business hours, and at the time and place of the Allied special meeting as required by law.

 

Allied directs your attention to the joint proxy statement/prospectus accompanying this notice for more detailed information regarding the matters proposed to be acted upon at the Allied special meeting. You are encouraged to read the entire joint proxy statement/prospectus carefully, including the merger agreement, as amended, which is included as Annex A to the joint proxy statement/prospectus, and the section discussing “Risk Factors” beginning on page 29.

 

SO THAT YOUR SHARES WILL BE REPRESENTED WHETHER OR NOT YOU ATTEND THE ALLIED SPECIAL MEETING, PLEASE SUBMIT A PROXY AS SOON AS POSSIBLE BY MAIL, BY TELEPHONE OR THROUGH THE INTERNET. INSTRUCTIONS ON THESE DIFFERENT WAYS TO SUBMIT YOUR PROXY ARE FOUND ON THE ENCLOSED PROXY FORM. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE ALLIED SPECIAL MEETING. REMEMBER, YOUR VOTE IS IMPORTANT, SO PLEASE ACT TODAY!

 

By Order of the Board of Directors,

 

John J. Zillmer

Chairman of the Board of Directors and Chief

Executive Officer

 

[          ], 2008

 

TABLE OF CONTENTS

 

 

SUMMARY

 

The Companies

 

The Merger

		Republic				Allied				Implied
		Common				Common				Value of Allied
		Stock				Stock				Common Stock
June 12, 2008		$	33.66			$	13.92			$	15.15
June 20, 2008		$	31.19			$	13.56			$	14.04
[      ], 2008		$				$				$

	•	“FOR” the Republic share issuance in connection with the merger; and
	•	“FOR” the adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

	•	“FOR” the adoption of the merger agreement; and
	•	“FOR” the adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

	•	the Republic board of directors must have a “Continuing Republic Committee,” consisting solely of five Continuing Republic Directors, defined as directors who are either (1) members of the Republic board of directors prior to the effective time of the merger, determined by the Republic board of directors to be “independent” of Republic under the rules of the NYSE and designated by Republic to be members of the Republic board of directors as of the effective time of the merger, or (2) subsequently nominated or appointed to be a member of the Republic board of directors by the Continuing Republic Committee;
	•	the Republic board of directors must have a “Continuing Allied Committee,” consisting solely of five Continuing Allied Directors, defined as directors who are either (1) members of the Allied board of directors prior to the effective time of the merger, determined by the Allied board of directors to be “independent” of Allied and Republic under the rules of the NYSE and designated by Allied to be members of the Republic board of directors as of the effective time of the merger, or (2) subsequently nominated or appointed to be a member of the Republic board of directors by the Continuing Allied Committee;
	•	the Republic board of directors must be comprised of eleven members, consisting of (1) the Chief Executive Officer of Republic, (2) five Continuing Republic Directors, and (3) five Continuing Allied Directors, provided that, notwithstanding the foregoing, after the Initial Continuation Period, the size of the Republic board of directors may be increased by the affirmative vote of a majority of the board of directors;
	•	at each meeting of the Republic stockholders during the Continuation Period at which directors are to be elected, (1) the Continuing Republic Committee shall have the exclusive authority on behalf of Republic to nominate as directors of the Republic board of directors, a number of persons for election equal to the number of Continuing Republic Directors to be elected at such meeting, and (2) the Continuing Allied Committee shall have the exclusive authority on behalf of Republic to nominate as directors of the Republic board of directors, a number of persons for election equal to the number of Continuing Allied Directors to be elected at such meeting; and

	•	all directors nominated or appointed by the Continuing Republic Committee or the Continuing Allied Committee, as the case may be, must be “independent” of Republic for purposes of the rules of the NYSE, as determined by a majority of the persons making the nomination or appointment.

	•	In addition, during the period commencing on the effective time of the merger and continuing until the close of business on the day immediately prior to the second annual meeting of Republic stockholders held after the effective time, referred to as the Initial Continuation Period, (1) if any Continuing Republic Director is removed from the Republic board of directors, becomes disqualified, resigns, retires, dies or otherwise cannot or will not continue to serve as a member of the Republic board of directors, such vacancy may only be filled by the Continuing Republic Committee, and (2) if any Continuing Allied Director is removed from the Republic board of directors, becomes disqualified, resigns, retires, dies or otherwise cannot or will not continue to serve as a member of the Republic board of directors, such vacancy may only be filled by the Continuing Allied Committee.

	•	during the Continuation Period, each committee of the Republic board of directors must be comprised of five members, consisting of three Continuing Republic Directors and two Continuing Allied Directors;
	•	the initial chairman of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee of the Republic board of directors as of the effective time of the merger will be, in each case, the Continuing Republic Director who was the chairman of such committee immediately prior to the effective time of the merger; and
	•	each Continuing Republic Director and Continuing Allied Director serving on the Audit Committee, the Nominating and Corporate Governance Committee or the Compensation Committee of the Republic board of directors must qualify as “independent” under the rules of the NYSE and, as applicable, the rules of the SEC.

	•	receipt of the Republic stockholder approval and Allied stockholder approval, in each case in accordance with Delaware law;

	•	the expiration or termination of the waiting period (and any extension thereof) applicable to the merger under the HSR Act;
	•	the absence of any law, temporary restraining order or preliminary or permanent injunction or other order making the merger illegal or otherwise prohibiting the consummation of the merger (collectively, “restraints”);
	•	the approval for listing on the NYSE, subject to official notice of issuance, of the shares of Republic common stock issuable in connection with the merger; and
	•	the effectiveness of, and the absence of any stop order with respect to, the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part.

	•	(x) certain representations and warranties made by the other party or parties in the merger agreement regarding capitalization, authority, broker fees, the opinion of the financial advisor, takeover laws, rights plans, ownership of stock, interests in competitors, insurance and RS Merger Wedge Inc.’s operations, being true and correct in all material respects on the date of the merger agreement and as of the closing date (or, if applicable, an earlier specified date) and (y) the other representations and warranties made by the other party or parties in the merger agreement being true and correct (without giving effect to any materiality or material adverse effect qualifications and words of similar import) on the date of the merger agreement and as of the closing date (or, if applicable, an earlier specified date), except in each case where the failure of any such representations and warranties to be true and correct would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the party making the representation or warranty (and provided that two representations and warranties made by Allied in respect of its indebtedness must be true and correct on the closing date without any materiality qualification);
	•	the performance by the other party or parties in all material respects of the covenants required to be performed by it or them at or before the effective time of the merger;
	•	receipt by each of Republic and Allied of an officer’s certificate of the other party on the closing date stating that the closing conditions with respect to such other party’s representations and warranties and covenants have been satisfied; and
	•	receipt by each party of an opinion of its own counsel that the merger will qualify as a tax-free reorganization.

	•	receipt by Republic of written confirmation from the applicable credit ratings agency that, upon the consummation of the merger, the consolidated senior unsecured debt of Republic (including Allied or any Allied subsidiary to the extent an issuer under certain indentures, and after giving effect to any parent or other guarantees required by such agency) will be rated either (i) BBB- or better by Standard & Poor’s and Ba1 or better by Moody’s, or (ii) Baa3 or better by Moody’s and BB+ or better by Standard & Poor’s. Each of Republic and Allied has committed to use its best efforts to ensure that this closing condition is satisfied.

	•	the merger has not been completed on or before May 15, 2009 (the “outside date”), except that the right to terminate the merger agreement under this provision will not be available to any party whose breach or failure to fulfill any obligation of the merger agreement has been a principal cause of or resulted in the failure of the merger to occur on or before the outside date;
	•	any restraint having the effect of making the merger illegal or otherwise prohibiting the completion of the merger becomes final and nonappealable; provided, however that the party electing to terminate pursuant to this provision will have used its reasonable best efforts to oppose any such restraint or to have such restraint vacated or made inapplicable to the merger; or
	•	the Republic stockholders or Allied stockholders fail to give the necessary approvals at their special meetings or any adjournments or postponements thereof.

	•	prior to the Allied stockholder approval, the Allied board of directors changes its recommendation to the Allied stockholders that they adopt the merger agreement unless, within ten business days, Republic requires the Allied board of directors to nevertheless submit such adoption to the Allied stockholders for approval despite such change in recommendation;
	•	Allied has breached any of its representations or warranties or failed to perform in any material respect any of its covenants or agreements set forth in the merger agreement, and such breach or failure to perform (i) would prevent Allied from satisfying the closing conditions of the merger agreement relating to the accuracy of the representations and warranties and/or compliance with covenants, and (ii) cannot be cured by the outside date or, if capable of being cured by that date, is not cured within 30 calendar days’ written notice to Allied; or
	•	prior to the Republic stockholder approval, the Republic board of directors changes its recommendation to the Republic stockholders that they approve the Republic share issuance and, within ten business days, Allied does not require the Republic board of directors to nevertheless submit the Republic share issuance to the Republic stockholders for approval despite such change in recommendation.

	•	prior to the Republic stockholder approval, the Republic board of directors changes its recommendation to the Republic stockholders that they approve the Republic share issuance unless, within ten business days, Allied requires the Republic board of directors to nevertheless submit the Republic share issuance to the Republic stockholders for approval despite such change in recommendation;
	•	Republic has breached any of its representations or warranties or failed to perform in any material respect any of its covenants or agreements set forth in the merger agreement, and such breach or failure to perform (i) would prevent Republic from satisfying the closing conditions of the merger agreement relating to the accuracy of the representations and warranties and/or compliance with covenants, and (ii) cannot be cured by the outside date or, if capable of being cured by that date, is not cured within 30 calendar days’ written notice to Republic; or
	•	prior to the Allied stockholder approval, the Allied board of directors changes its recommendation to the Allied stockholders that they adopt the merger agreement and, within ten business days, Republic does not require the Allied board of directors to nevertheless submit such adoption to the Allied stockholders for approval despite such change in recommendation.

	•	if the merger agreement is terminated by Republic or Allied following the failure by Republic to obtain the Republic stockholder approval, and (1) prior to such termination, an acquisition proposal with respect to Republic has been publicly announced or made known to the Republic board of directors and (2) within 12 months of such termination, Republic enters into a binding agreement to effect an acquisition proposal or consummates an acquisition proposal; or

	•	if the merger agreement is terminated by Republic or Allied following a change in the Republic recommendation, but only if (1) Allied does not require the Republic board of directors to nevertheless submit the Republic share issuance to the Republic stockholders for approval despite such change in the Republic recommendation or (2) Allied is otherwise entitled to the payment of a termination fee and expenses under the circumstances described in the immediately preceding clause.

	•	if the merger agreement is terminated by Republic or Allied following the failure by Allied to obtain the Allied stockholder approval, and (1) prior to such termination, an acquisition proposal with respect to Allied has been publicly announced or made known to the Allied board of directors and (2) within 12 months of such termination, Allied enters into a binding agreement to effect an acquisition proposal or consummates an acquisition proposal; or

	•	if the merger agreement is terminated by Republic or Allied following a change in the Allied recommendation, but only if (1) Republic does not require the Allied board of directors to nevertheless submit such adoption to the Allied stockholders for approval despite such change in the Allied recommendation or (2) Republic is otherwise entitled to the payment of a termination fee and expenses under the circumstances described in the immediately preceding clause.

Name		Title
James E. O’Connor		Chief Executive Officer and Chairman of the Board
Donald W. Slager		Chief Operating Officer and President
Tod C. Holmes		Executive Vice President and Chief Financial Officer
Michael J. Cordesman		Executive Vice President
Timothy R. Donovan		Executive Vice President, General Counsel and Secretary

	•	approve the issuance of shares of Republic common stock and other securities in connection with the merger; and
	•	approve an adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

	•	under the NYSE rules, the Republic share issuance requires the affirmative vote of holders of shares of Republic common stock representing a majority of votes cast on the proposal, provided that the total number of votes cast on the proposal represents a majority of the total number of shares of Republic common stock issued and outstanding on the record date for the Republic special meeting; and
	•	under the Republic bylaws, the Republic share issuance requires the affirmative vote of holders of shares of Republic common stock representing a majority of the total number of shares of Republic common stock present, in person or by proxy at the special meeting, and entitled to vote on the proposal.

 

	•	you can send a signed notice of revocation of proxy;
	•	you can grant a new, valid proxy bearing a later date;
	•	you can revoke the proxy in accordance with the telephone or Internet proxy submission procedures described in the proxy voting instructions attached to the proxy card; or
	•	if you are a holder of record, you can attend the Republic special meeting and vote in person, which will automatically cancel any proxy previously given, but your attendance alone will not revoke any proxy that you have previously given.

	•	adopt the merger agreement, pursuant to which Allied will become a wholly owned subsidiary of Republic; and
	•	approve an adjournment of the Allied special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

	•	the adoption of the merger agreement requires the affirmative vote of holders of shares of Allied common stock representing a majority of the total number of shares of Allied common stock issued and outstanding on the Allied record date; and
	•	the approval of an adjournment of the Allied special meeting, if necessary, to solicit additional proxies in favor of the adoption of the merger agreement, requires the affirmative vote of holders of shares of Allied common stock representing a majority of the total number of shares of Allied common stock present, in person or by proxy at the Allied special meeting, and entitled to vote on the proposal.

	•	you can send a signed notice of revocation of proxy;
	•	you can grant a new, valid proxy bearing a later date;
	•	you can revoke the proxy in accordance with the telephone or Internet proxy submission procedures described in the proxy voting instructions attached to the proxy card; or
	•	if you are a holder of record, you can attend the Allied special meeting and vote in person, which will automatically cancel any proxy previously given, but your attendance alone will not revoke any proxy that you have previously given.

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF REPUBLIC
(in millions, except per share data)

		Six Months
		Ended June 30,								Years Ended December 31,
		2008(1)				2007(2)				2007(2)				2006				2005				2004				2003
Statement of Income Data:
Revenue		$	1,606.7			$	1,574.0			$	3,176.2			$	3,070.6			$	2,863.9			$	2,708.1			$	2,517.8
Expenses:
Cost of operations			1,054.0				986.3				1,997.3				1,924.4				1,803.9				1,714.4				1,605.4
Depreciation, amortization and depletion			149.6				155.9				305.5				296.0				278.8				259.4				239.1
Accretion			8.9				8.3				17.1				15.7				14.5				13.7				12.7
Selling, general and administrative			166.4				155.7				320.3				315.0				289.5				268.3				247.9
Operating income			227.8				267.8				536.0				519.5				477.2				452.3				412.7
Interest expense			(42.5	)			(47.2	)			(94.8	)			(95.8	)			(81.0	)			(76.7	)			(78.0	)
Interest income			5.3				6.4				12.8				15.8				11.4				6.9				9.5
Other income (expenses), net			.9				1.1				14.1				4.2				1.6				1.2				3.2
Income before income taxes			191.5				228.1				468.1				443.7				409.2				383.7				347.4
Provision for income taxes			74.7				87.0				177.9				164.1				155.5				145.8				132.0
Income before cumulative effect of changes in accounting principles			116.8				141.1				290.2				279.6				253.7				237.9				215.4
Cumulative effect of changes in accounting principles			—				—				—				—				—				—				(37.8	)
Net income		$	116.8			$	141.1			$	290.2			$	279.6			$	253.7			$	237.9			$	177.6
Basic earnings per share:
Before cumulative effect of changes in accounting principles		$	.64			$	.73			$	1.53			$	1.41			$	1.23			$	1.10			$	.96
Cumulative effect of changes in accounting principles			—				—				—				—				—				—				(.17	)
Basic earnings per share		$	.64			$	.73			$	1.53			$	1.41			$	1.23			$	1.10			$	0.79
Weighted average common shares outstanding			182.7				193.2				190.1				198.2				207.0				217.3				224.8
Diluted earnings per share:
Before cumulative effect of changes in accounting principles		$	.63			$	.72			$	1.51			$	1.39			$	1.20			$	1.08			$	.95
Cumulative effect of changes in accounting principles			—				—				—				—				—				—				(.17	)

		Six Months
		Ended June 30,								Years Ended December 31,
		2008(1)				2007(2)				2007(2)				2006				2005				2004				2003
Diluted earnings per share		$	.63			$	.72			$	1.51			$	1.39			$	1.20			$	1.08			$	.78
Weighted average common and common equivalent shares outstanding			184.5				195.1				192.0				200.6				210.8				221.1				227.6
Cash dividends per common share		$	.3400			$	.2134			$	.5534			$	.4000			$	.3466			$	.2400			$	.0800
Balance Sheet Data:
Cash and cash equivalents		$	13.1			$	25.9			$	21.8			$	29.1			$	131.8			$	141.5			$	119.2
Restricted cash and marketable securities			177.8				129.4				165.0				153.3				255.3				275.7				397.4
Total assets			4,547.5				4,416.2				4,467.8				4,429.4				4,550.5				4,464.6				4,554.1
Total debt			1,617.0				1,498.3				1,567.8				1,547.2				1,475.1				1,354.3				1,520.3
Total stockholders’ equity			1,261.8				1,388.4				1,303.8				1,422.1				1,605.8				1,872.5				1,904.5

(1)		During the six months ended June 30, 2008, Republic recorded a pre-tax charge of $34.0 million ($21.8 million, or $.12 per diluted share, net of tax) related to additional orders received from the Ohio Environmental Protection Agency regarding environmental conditions at its Countywide Recycling and Disposal Facility in Ohio. Also during the six months ended June 30, 2008, Republic recorded a pre-tax charge of $35.0 million ($22.0 million, or $.12 per diluted share, net of tax) related to estimated costs believed required to comply with a Consent Decree and Settlement Agreement that Republic signed with the U.S. EPA, the Bureau of Land Management and Clark County, Nevada related to the Sunrise Landfill in Nevada.
(2)		During the six months ended June 30, 2007, Republic recorded a pre-tax charge of $22.0 million ($13.5 million, or $.07 per diluted share, net of tax) related to estimated costs believed required to comply with final findings and orders issued by the Ohio Environmental Protection Agency in response to environmental conditions at its Countywide Recycling and Disposal Facility in Ohio. During the three months ended September 30, 2007, Republic agreed to take certain additional remedial actions at Countywide and recorded an additional pre-tax charge of $23.3 million ($14.4 million, or $.08 per diluted share, net of tax).

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF ALLIED
(in millions, except per share data)

		Six Months Ended June 30,								Years Ended December 31,
		2008				2007				2007				2006				2005				2004				2003(5)
Statement of Operations Data(1):
Revenues		$	3,066.5			$	2,992.1			$	6,068.7			$	5,908.5			$	5,612.2			$	5,396.5			$	5,264.1
Cost of operations			1,920.3				1,886.8				3,787.1				3,786.4				3,654.6				3,428.8				3,235.8
Selling, general and administrative expenses			292.1				324.2				631.9				587.3				510.2				544.7				471.7
Merger-related costs			9.0				—				—				—				—				—				—
Depreciation and amortization			277.5				269.9				553.5				557.7				543.6				547.1				534.1
Loss (gain) from divestitures and asset impairments(2)			23.8				1.5				40.5				22.5				—				—				—
Operating income			543.8				509.7				1,055.7				954.6				903.8				875.9				1,022.5
Interest expense and other(3)			216.1				294.1				538.4				563.4				583.1				752.5				826.1
Income from continuing operations before income taxes			327.7				215.6				517.3				391.2				320.7				123.4				196.4
Income tax expense			142.8				90.3				207.1				235.3				131.1				70.6				86.6
Minority interests			0.9				—				0.4				0.1				(0.2	)			(2.7	)			1.9
Income from continuing operations		$	184.0			$	125.3			$	309.8			$	155.8			$	189.8			$	55.5			$	107.9
Basic earnings per share:
Continuing operations		$	.43			$	.29			$	.74			$	.32			$	.42			$	.11			$	(2.37	)
Weighted average common shares			411.1				368.2				368.8				356.7				326.9				315.0				203.8
Diluted earnings per share:
Continuing operations		$	.42			$	.29			$	.71			$	.32			$	.42			$	.11			$	(2.37	)
Weighted average common and common equivalent shares			444.8				381.5				443.0				359.3				330.1				319.7				203.8
Balance Sheet Data(1):
Cash and cash equivalents		$	69.4			$	107.6			$	230.9			$	94.1			$	56.1			$	68.0			$	444.7
Total assets			13,936.3				13,863.6				13,948.7				13,811.0				13,661.3				13,539.2				13,860.9
Total debt			6,578.1				6,861.3				6,642.9				6,910.6				7,091.7				7,757.0				8,234.1
Stockholders’ equity(4)			4,107.2				3,732.4				3,904.2				3,598.9				3,439.4				2,604.9				2,517.7

(1)		During 2007, 2004 and 2003, Allied sold or held for sale certain operations that met the criteria for reporting as discontinued operations. The selected financial data for all prior periods has been reclassified to exclude these operations from continuing operations.
(2)		Loss (gain) from divestitures and asset impairments includes asset sales completed as a result of Allied’s market rationalization focus and are not included in discontinued operations. The amount of $23.8 million for the six months ended June 30, 2008 includes asset impairment charges of $22.9 million related to two landfill closures in Allied’s Midwest region. The amount of $40.5 million for the year ended December 31, 2007 includes asset impairments of $27.1 million, of which $24.5 million related to the asset impairment charge for one of the Midwest region landfills mentioned previously. The amount of $22.5 million for the year ended December 31, 2006 includes $9.7 million of landfill asset impairments resulting from management’s decision to discontinue development and operations of certain sites and a $5.2 million charge related to the relocation of Allied’s operations support center.
(3)		Includes costs incurred to extinguish debt for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 of $59.6 million, $41.3 million, $62.6 million, $156.2 million and $108.1 million, respectively.
(4)		In 2006, Allied recorded an after-tax charge of $57.4 million to stockholders’ equity relating to the adoption of SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106 and 132(R) (SFAS 158).
(5)		During December 2003, all of Allied’s Series A Preferred Stock was exchanged for 110.5 million shares of common stock. In connection with the exchange, Allied recorded a reduction to net income available to common shareholders of $496.6 million for the fair value of the incremental shares of common stock issued to the holders of the preferred stock over the amount the holders would have received under the original conversion provisions.

 

SELECTED UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL DATA

		For the Six Months				For the Year Ended
		Ended June 30, 2008				December 31, 2007
		(in millions,				(in millions,
		except per				except per
		share data)				share data)
STATEMENT OF INCOME FROM CONTINUING OPERATIONS DATA:
Revenue		$	4,673.2			$	9,244.9
Operating income			743.4				1,527.6
Income from continuing operations			285.4				571.5
Income from continuing operations available to common shareholders			279.2				534.0
Basic income from continuing operations available to common shareholders per share			.76				1.49
Diluted income from continuing operations available to common shareholders per share			.74				1.47
Cash dividends per common share			.34				.55

		As of June 30, 2008
		(in millions)
BALANCE SHEET DATA:
Cash and cash equivalents		$	19.0
Restricted cash (current and non-current)			262.9
Total assets			20,441.6
Total debt			8,197.4
Total stockholders’ equity			7,457.3

 

COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA

		As of and for the				For the
		Six Months Ended				Year Ended
		June 30, 2008				December 31, 2007
Republic Historical Per Share Data:
Income from continuing operations available to common shareholders —
Basic		$	.64			$	1.53
Diluted			.63				1.51
Cash dividends per common share			.34				.55
Book value per common share			6.94				N/A
Republic Unaudited Pro Forma Consolidated Per Share Data:
Income from continuing operations available to common shareholders —
Basic		$	.76			$	1.49
Diluted			.74				1.47
Cash dividends per common share			.34				.55
Book value per common share			19.72				N/A
Allied Historical Per Share Data:
Income from continuing operations available to common shareholders —
Basic		$	.43			$	.74
Diluted			.42				.71
Cash dividends per common share			—				—
Book value per common share			9.48				N/A
Allied Unaudited Equivalent Pro Forma Per Share Data:(1)
Income from continuing operations available to common shareholders —
Basic		$	.34			$	.67
Diluted			.33				.66
Cash dividends per common share			.15				.25
Book value per common share			8.87				N/A

(1)		The equivalent pro forma per share data for Allied was calculated by multiplying the Republic pro forma consolidated per share data above by the exchange ratio of .45. Under the terms of the merger agreement, Allied stockholders will receive .45 shares of Republic stock for each share of Allied common stock held at the effective time of the merger.

 

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

		Republic Common Stock												Allied Common Stock
		Market Price												Market Price
		High				Low				Dividends				High				Low				Dividends
2006
First Quarter		$	28.49			$	24.47			$	.0933			$	12.24			$	8.53			$	—
Second Quarter			29.47				25.75				.0933				14.26				10.66				—
Third Quarter			27.53				25.04				.1067				11.27				9.78				—
Fourth Quarter			28.83				26.57				.1067				13.50				11.19				—
2007
First Quarter			29.67				26.22				.1067				13.22				12.23				—
Second Quarter			31.09				27.05				.1067				14.00				12.41				—
Third Quarter			33.26				27.93				.1700				13.97				11.90				—
Fourth Quarter			35.00				30.90				.1700				13.15				10.75				—
2008
First Quarter			32.00				27.30				.1700				10.90				9.30				—
Second Quarter			34.44				29.09				.1700				15.00				11.12				—
Third Quarter			36.52				27.29				.1900				13.72				10.73				—
Fourth Quarter (through October 1, 2008)			29.95				29.21				—				11.46				10.68				—

										Implied Value
		Republic				Allied				of Allied
		Common Stock				Common Stock				Common Stock
June 12, 2008		$	33.66			$	13.92			$	15.15
June 20, 2008			31.19				13.56				14.04
[      ], 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition to the other information included and incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements” below, you should carefully consider the following risk factors before deciding whether to vote for the Republic share issuance, in the case of Republic stockholders, or for adoption of the merger agreement, in the case of Allied stockholders. In addition to the risk factors set forth below, you should read and consider other risk factors specific to each of the Republic and Allied businesses that will also affect the combined company after the merger, which are described in Part I, Item 1A of each company’s Annual Report on Form 10-K for the year ended December 31, 2007, each of which has been filed by Republic or Allied, as applicable, with the SEC and all of which are incorporated by reference into this joint proxy statement/prospectus. If any of the risks described below or in the periodic reports incorporated by reference into this joint proxy statement/prospectus actually occurs, the businesses, financial condition, results of operations, prospects or stock prices of Republic, Allied or the combined company could be materially adversely affected. See “Where You Can Find More Information,” beginning on page 158.

 

The exchange ratio is fixed and will not be adjusted. The market price of shares of Republic common stock may fluctuate, and Allied stockholders cannot be sure of the market value of the shares of Republic common stock that will be issued pursuant to the merger.

 

Upon completion of the merger, each share of Allied common stock outstanding immediately prior to the merger will be converted into the right to receive .45 shares of Republic common stock, with cash being paid in lieu of any fractional shares. The exchange ratio is fixed at .45 shares of Republic common stock for each share of Allied common stock, and will not be adjusted to reflect any increases or decreases in the price of Republic common stock or Allied common stock. The value a stockholder receives pursuant to the merger in respect of the stockholder’s Allied common stock will depend upon the market price of a share of Republic common stock upon the completion of the merger. If the price of Republic common stock declines, Allied stockholders will receive less value for their shares upon completion of the merger than the value calculated pursuant to the exchange ratio on the date immediately prior to the date on which the parties confirmed that they were engaged in merger discussions, the date immediately prior to the date the merger agreement was signed or the date of the Allied special meeting.

 

Due to the regulatory approval process, the merger may not be completed until a significant period of time has passed after the Republic and Allied special meetings, during which time the market value of Republic common stock and Allied common stock may fluctuate. Therefore, at the time of their respective special meetings, Republic and Allied stockholders will not know the exact market value of Republic common stock that will be issued in connection with the merger. The market price of a share of Republic common stock at the time the merger is completed is likely to be different, and may be lower or higher, than it was at the time the parties confirmed that they were engaged in merger discussions, the time the merger agreement was executed or the time of the special meetings. The closing sale price of Republic common stock on the NYSE on June 12, 2008, the last trading day before the day on which Republic and Allied confirmed that they were involved in discussions regarding a possible business combination, was $33.66 per share. From June 13, 2008 through the date of this joint proxy statement/prospectus, the trading price of Republic common stock ranged from a high of $36.52 per share to a low of $27.29 per share. For Republic and Allied historical market prices, see “Comparative Per Share Market Price and Dividend Information” beginning on page 22.

 

Stock price changes may result from a variety of factors, including:

 

 

 

Republic and Allied stockholders are urged to obtain current market quotations for Republic and Allied common stock when they consider whether to approve the proposals required to complete the merger at the respective special meetings.

 

The fairness opinions obtained by Republic and Allied from their respective financial advisors will not reflect changes in circumstances between the signing of the merger agreement and the completion of the merger.

 

Neither Republic nor Allied has obtained an updated fairness opinion as of the date of this joint proxy statement/prospectus from Merrill Lynch, Republic’s financial advisor, or UBS, Allied’s financial advisor. Changes in the operations and prospects of Republic or Allied, general market and economic conditions, and other factors that may be beyond the control of Republic and Allied, and on which the fairness opinions were based, may alter the value of Republic or Allied or the prices of shares of Allied common stock or Republic common stock by the time the merger is completed. The opinions do not speak as of the time the merger will be completed or as of any date other than the dates of such written opinions. Because neither Republic nor Allied anticipates asking its respective financial advisor to update its opinion, the written opinions dated June 22, 2008 do not address the fairness of the exchange ratio, from a financial point of view, at the time the merger is completed. The opinions are included as Annex C and D to this joint proxy statement/prospectus. For a description of the opinion that Republic received from its financial advisor and a summary of the material financial analyses provided to the Republic board of directors in connection with rendering such opinion, see “Opinion of Financial Advisor to the Republic Board of Directors” beginning on page 64. For a description of the opinion that Allied received from its financial advisor and a summary of the material financial analyses provided to the Allied board of directors in connection with rendering such opinion, see “Opinion of Financial Advisor to the Allied Board of Directors” beginning on page 78. For a description of the other factors considered by the Republic board of directors in determining to approve the merger, see “Republic Reasons for the Merger” beginning on page 59. For a description of the other factors considered by the Allied board of directors in determining to approve the merger, see “Allied Reasons for the Merger” beginning on page 72.

 

The merger is subject to the receipt of consents, approvals and non-objections from anti-trust regulators, which may impose conditions on, jeopardize or delay completion of the merger, result in additional expenditures of money and resources, reduce the anticipated benefits of the merger or cause the failure of the completion of the merger.

 

Completion of the merger is conditioned upon filings with, and the receipt of required consents, orders, approvals, non-objections or clearances from, the Antitrust Division of the U.S. Department of Justice under the HSR Act. Republic and Allied intend to pursue these consents, orders, approvals, non-objections and clearances in accordance with the merger agreement. There can be no assurance, however, that these consents,

orders, approvals, non-objections and clearances will be obtained or, if they are obtained, that they will not impose conditions on, or require divestitures relating to, the divisions, operations or assets of Republic or Allied. These conditions or divestitures may jeopardize or delay completion of the merger, result in additional expenditures of money and resources, or reduce the anticipated benefits of the merger. The merger agreement requires Republic and Allied to satisfy any conditions or divestiture requirements imposed upon them unless the conditions or divestitures individually or in the aggregate would reasonably be expected to have a material adverse effect after the effective time of the merger on the assets and liabilities, financial condition or business of Republic and its subsidiaries (including the combined company and its subsidiaries), taken as a whole, or the benefits expected to be derived by the parties on the date of the merger agreement from the combination of Republic and Allied via the merger (such combined business to be taken as a whole) in such a manner that such party would not have entered into the merger agreement in the face of such materially and adversely affected benefits. See “The Merger Agreement — Conditions to Completion of the Merger” beginning on page 119 for a discussion of the conditions to the completion of the merger and “Regulatory Matters” beginning on page 96 for a description of the regulatory approvals necessary in connection with the merger.

 

There can be no assurance that the merger will be consummated. The announcement and pendency of the merger, or the failure of the merger to be consummated, could have an adverse effect on Republic’s or Allied’s stock price, business, financial condition, results of operations or prospects.

 

The merger is subject to a number of conditions to closing, including (i) the approval of the issuance of shares of Republic common stock in accordance with the terms of the merger agreement, (ii) the adoption of the merger agreement by the Allied stockholders, (iii) the expiration or termination of the waiting period (and any extension thereof) or the resolution of any litigation instituted applicable to the merger under the HSR Act or any other applicable federal or state statue or regulation, (iv) no temporary restraining order, preliminary or permanent injunction or other order shall have been issued (and remain in effect) by a court or other governmental entity having the effect of making the merger illegal or otherwise prohibiting the consummation of the merger, (v) the approval for listing on the NYSE of the shares of Republic common stock issuable in connection with the merger, and (vi) receipt by Republic of written confirmation from the applicable credit ratings agencies of the senior unsecured debt rating of Republic (including certain subsidiaries of Allied who are issuers of debt and will become subsidiaries of Republic at the effective time) upon the consummation of the merger. See “The Merger Agreement — Conditions to Completion of the Merger,” beginning on page 119.

 

If the stockholders of Republic fail to approve the Republic share issuance or if Allied stockholders fail to adopt the merger agreement, Republic and Allied will not be able to complete the merger. Additionally, if the other closing conditions are not met or waived, the companies will not be able to complete the merger. In addition, on July 14, 2008 and August 11, 2008, Waste Management, Inc. made unsolicited proposals to acquire Republic. While Republic refused to enter into discussions with Waste because neither proposal constituted a superior proposal, and could not reasonably be expected to lead to a superior proposal, there can be no assurance that Waste will not make a further proposal or that any such proposal will not result in the termination of the merger agreement. As a result, there can be no assurance that the merger will be completed in a timely manner or at all.

 

Further, the announcement and pendency of the merger could disrupt Republic’s and Allied’s businesses, in any of the following ways, among others:

 

 

Republic and Allied may face additional challenges in competing for new business and retaining or renewing business. These disruptions could be exacerbated by a delay in the completion of the merger or termination of the merger agreement.

 

For the foregoing reasons, there can be no assurance that the announcement and pendency of the merger, or the failure of the merger to be consummated, will not have an adverse effect on Republic’s or Allied’s stock price, business, financial condition, results of operations or prospectus.

 

There can be no assurance that the combined company will obtain investment grade credit ratings at the closing of the merger, which could impact the results of operations of the combined company after the merger.

 

Under the merger agreement, Republic is not required to consummate the merger unless, upon consummation of the merger, the senior unsecured debt rating of Republic (including certain subsidiaries of Allied who are issuers of debt and will become subsidiaries of Republic at the effective time) is at least investment grade from one of Standard & Poor’s and Moody’s (and no lower than one level below investment grade from the other rating agency). See “The Merger Agreement — Conditions to Completion of the Merger,” beginning on page 119. There can be no assurance that this condition to the closing of the merger will be satisfied. The parties anticipate that Republic’s senior unsecured debt rating upon consummation of the merger will be investment grade (although lower than Republic’s senior unsecured debt rating prior to announcement of the merger). Republic could, however, waive the condition to closing of the merger that Republic’s rating be at least investment grade from one of Standard & Poor’s and Moody’s (and no lower than one level below investment grade from the other rating agency). If Republic closes the merger without an investment grade credit rating, then the combined company could have increased interest expenses and more burdensome covenants in its financing agreements. That could adversely impact the growth prospects and the results of operations of the combined company.

 

There can be no assurance that Republic will be able to satisfy all conditions necessary in order to borrow under the debt financing contemplated in connection with the merger.

 

Completion of the merger is not conditioned on receipt of any financing. Republic has agreed to use its best efforts to arrange financing sufficient to refinance or amend the terms of Allied’s existing senior secured credit facility, which includes a revolving credit facility, a term loan facility, an institutional letter of credit facility and an incremental revolving letter of credit facility. Republic intends to accomplish the refinancing through a combination of a new $1.75 billion senior revolving credit facility and Republic’s existing $1.0 billion senior revolving credit facility. Republic has entered into the new facility and has also entered into an amendment to its existing facility that is necessary to permit the merger, but there can be no assurance that Republic will be able to satisfy all the conditions necessary to borrow funds under the new facility and the existing facility in order to complete the merger. If such conditions are not satisfied, then alternative financing obtained in lieu of the financings contemplated by the existing commitments may have higher interest rates than Republic or Allied currently anticipate, which could increase the combined company’s interest expense, and may contain more burdensome covenants than Republic’s current debt instruments.

 

The merger agreement limits Republic’s and Allied’s ability to pursue an alternative acquisition proposal and requires Republic or Allied to pay a termination fee of $200 million, plus expenses, if it does.

 

The merger agreement prohibits Republic and Allied from soliciting, initiating or encouraging alternative merger or acquisition proposals with any third party. The merger agreement also provides for the payment by either of Republic or Allied to the other of a termination fee of $200 million, plus up to $50 million in expenses, if the merger agreement is terminated in certain circumstances in connection with a competing acquisition proposal for that company or the withdrawal by the board of directors of that company of its recommendation that the stockholders of that company vote in favor of the proposals required to consummate the merger, as the case may be. See “The Merger Agreement — Termination Fees,” beginning on page 121.