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The credit crunch has made it nearly impossible for private equity firms to pull off multi-billion dollar deals. As a result, a variety of strategic buyers have capitalized on the situation.
But, even this trend may falter. Just look at Waste Management Inc.'s (NYSE: WMI) $6.73 billion buyout bid for rival Republic Services Inc. (NYSE: RGS) Well, today Waste Management said it is going to drop the deal.
Why? Of course, it's about the "market conditions."
But, even top companies are having difficulties getting financing. Besides, a big financial commitment could put pressure on Waste Management's credit rating.
Then again, the good news for Waste Management is that the core business continues to be strong. The company forecasts Q3 earning at $0.62 to $0.63 per share. In fact, the recent decline in fuel costs should be a nice boost.
So far in today's trading, the shares of Waste Management are up 6% to $27.29. Republic's shares are up 3.47% to $3.47%.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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