Safety-Kleen Finds Refuge in Canada Company Sells out to Philip, Expects to Keep Jobs, Office

By Culloton, Dan | Daily Herald (Arlington Heights, IL), November 21, 1997 | Go to article overview

Safety-Kleen Finds Refuge in Canada Company Sells out to Philip, Expects to Keep Jobs, Office


Culloton, Dan, Daily Herald (Arlington Heights, IL)


Byline: Dan Culloton Daily Herald Business Writer

Elgin-based Safety-Kleen Corp., the target of an unwelcome takeover bid from a South Carolina company, on Thursday accepted a $1.9 billion offer from a Canadian corporation.

Safety-Kleen agreed to sell out to industrial waste recycler and cleaner Philip Services Corp. of Hamilton, Ontario, for $27 per share in cash.

The transaction is not expected to cost the largest publicly traded company based in Elgin any jobs, and Safety-Kleen expects to keep its name and headquarters on Randall Road, as well as its two branch offices in the city, executives said.

Elgin Mayor Kevin Kelly was pleased to hear the company that employs 810 people in town was staying put.

"Safety Kleen is one of Elgin's most important employers," he said. "We congratulate them and Philip Services on the merger and are optimistic about the organization's future."

But investors on Wall Street seemed to think future of Safety-Kleen is far from settled. The company's stock closed at $27.37, slightly above Philip's offer. That could mean many think bidding is still open on Safety-Kleen.

Analysts said Philip Services' cash offer is superior to the hostile cash and stock bid Laidlaw Environmental Services Inc. launched for Safety-Kleen earlier this month.

"When deals like this some out, cash seems to be king," said Michael Hutchinson, an analyst with Barrington Research Associates in Chicago.

Columbia, S.C., based Laidlaw Environmental Inc., which is majority owned by Laidlaw Inc. of Canada, offered $14 in cash plus 2.4 shares of its stock for each Safety-Kleen share, or about $26 per share.

However, Laidlaw could sweeten its offer, or another company could enter the fray, igniting a drawn out battle for Safety-Kleen.

On Thursday Laidlaw Environmental Chief Executive Officer Kenneth Winger said the company was "considering the alternatives and will respond in due course."

"I'm not going to rule out any alternatives until we've considered them," he said.

As recently as Tuesday, Laidlaw Environmental tried to meet with Safety-Kleen shareholders. In response Safety-Kleen filed a lawsuit in U.S. District Court in Northern Illinois.

If Philip's offer prevails, the deal is expected to close in January or February, said Allen Fracassi, president and chief executive of Philip Services. …

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