Huizenga’s Acquisition of ADT Is Called Off
Republic Industries Inc.’s proposed $4.3-billion acquisition of ADT Ltd. was called off Monday, in a setback for empire builder Wayne Huizenga, the chairman of Republic.
ADT is the nation’s largest burglar alarm company and second in the growing field of used-car auctions, two businesses targeted by Huizenga before the stock-swap deal was announced three months ago.
But doubts about the viability of the merger arose after Western Resources, a Topeka, Kan.-based utility and ADT’s largest shareholder with 24% of the stock, came out against the deal.
The disintegration of the merger hurts Huizenga’s image as a deal maker who establishes national brands out of splintered industries. He built Blockbuster into a video rental giant and Waste Management, now WMX Technologies, into a trash king. The owner of three sports franchises also has interests in solid-waste companies and extended-stay hotels.
The breakup of the deal is viewed as a plus for ADT.
“The prospects for ADT are, if anything, improved by this announcement . . . because it alleviates a major distraction that the companies faced,” Lehman Bros. analyst Jeffrey Kessler said.
In calling off the merger, the companies cited other, undisclosed expansion plans, stock market conditions and delays they foresaw in trying to complete the deal.
“Despite both companies’ initial enthusiasm about this transaction, we now have agreed that this combination is no longer in the best interests of our respective companies,” Huizenga said. “The delay in completing this transaction has been inconsistent with our expansion plans.”
ADT Chairman and President Michael Ashcroft issued a similar statement, saying, “The delay in completing the transaction forced both companies to put business expansion plans on hold for too long.”
Fort Lauderdale, Fla.-based Republic’s stock was up $1.75 to $29 a share in Nasdaq trading, and New York Stock Exchange-listed ADT was down 87.5 cents at $19.
ADT, based in Bermuda, is the largest provider of electronic security services in North America and Britain, with 1.4 million customers. It does business with all but a handful of the Fortune 500 companies.
