Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Waste Management, Inc. (NYSE: WM) on behalf of senior notes investors following a class action complaint that was filed against Waste Management on June 10, 2022 with a Class Period from February 13, 2020 to June 23, 2020. Our investigation concerns whether the board of directors of Waste Management have breached their fiduciary duties to the company.
On April 14, 2019, Waste Management, Inc entered into an agreement and plan of merger (the "Merger") to acquire Advanced Disposal Systems, Inc. for $4.9 billion, or $33.15 per share. The Merger was conditioned upon an Advanced Disposal Systems, Inc shareholder vote and obtaining antitrust clearance from regulators, including the U.S. Department of Justice ("DOJ").
On May 14, 2019, Waste Management, Inc. issued $4 billion worth of senior notes in a public offering to finance Waste Management's acquisition of Advanced Disposal Services. All series received an investment grade rating. As described in the final prospectus for the Notes, four of the five series, totaling $3 billion in principal, were subject to a special mandatory redemption ("SMR") clause in the merger agreement. The SMR clause required Waste Management to repurchase the Notes for 101% of par in the event the Merger was not completed by July 14, 2020, the end date under the Merger Agreement (the "End Date"). In the Notes prospectus, Waste Management represented that the "Merger will close by the first quarter of 2020." And to address the concerns raised by the DOJ, Waste Management and Advanced Disposal Services engaged in extensive negotiations with several potential divesture buyers, including GFL Environmental, Inc., for the divesture of assets well in excess of the Antitrust Revenue Threshold.
On October 25, 2019, Waste Management, Inc, Advanced Disposal Systems, Inc, and the DOJ entered into a timing agreement that provided for a minimum 70-day settlement period during which the parties would attempt to reach an agreement on DOJ approval for the Merger, which included DOJ approval of the amount of Waste Management, Inc 's asset divestures. Unbeknownst to investors, during this process the DOJ informed Waste Management, Inc that its agreement to divest $200 million in revenue-producing assets to address antitrust concerns would be insufficient for regulatory approval. The DOJ concluded that the combination of Waste Management, Inc and Advanced Disposal Systems, Inc would, without divestures significantly in excess of $200 million, cause harm to municipal solid waste disposal in 24 geographic markets across 8 states, and cause harm to small container commercial waste collection in 33 geographic markets located in 6 states.
On June 24, 2020, Waste Management, Inc disclosed that the Company and Advanced Disposal Systems, Inc S had revised the terms of the Merger and that Waste Management, Inc needed to divest substantially more assets than previously disclosed to receive DOJ approval for the deal. Under the revised Merger terms, Waste Management, Inc agreed to purchase ADS for $4.6 billion, or $30.30 per share, thereby reducing Waste Management, Inc 's acquisition cost by approximately $300 million to $4.6 billion. In addition, Waste Management, Inc and Advanced Disposal Systems, Inc had agreed to sell $835 million worth of assets in an attempt to satisfy antitrust regulators, which assets were responsible for generating approximately $345 million in 2019 revenue. WM also revealed that the deal was now not expected to close until "the end of the third quarter of 2020" - six months later than had been represented by defendants at the start between February 13, 2020 and June 23, 2020 and, critically, after the end date which triggered the redemption feature of the Notes.
On this news, the prices of the Notes fell significantly.
According to the complaint the plaintiff alleges that between February 13, 2020 and June 23, 2020, the defendants made false and/or misleading statements and/or failed to disclose that: (i) the DOJ had indicated to Waste Management that it would require Waste Management to divest significantly more assets than the $200 million Antitrust Revenue Threshold; (ii) as a result, the merger would not be completed by the End Date; and (iii) the Notes would be subject to mandatory redemption at 101% of par.
If you are a long-term stockholder of Waste Management, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221004006191/en/
Contacts
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
