Waste Industries bought out; Cherokee searches for answers; Manor Care gets go ahead in Pennsylvania

By Evan Weinberger

New York, Dec. 18 - Shareholders won't have Raleigh, N.C.-based Waste Industries USA Inc. to worry about anymore. The trash hauling and recycling company announced the completion of a deal to go private Tuesday before the market open.

The investor group taking Waste Industries private is led by the company's founder and chairman, Lonnie C. Poole Jr., and Waste Industries president and chief executive officer Jim. W. Perry. Macquarie Infrastructure Partners and Goldman Sachs are also in on the deal.

The investor group will pay existing Waste Industries stockholders $38 per share, or a total of around $544 million. That represents a 33% premium on Waste Industries' closing stock price on the Nasdaq on Oct. 22, when the group initially made the offer, and a 28% premium over its close Monday. The original offer was $518 million.

"We firmly believe that going private is the most attractive path available for the company, our shareholders, employees, customers, vendors and the communities which we serve," Poole said in a statement. "Transitioning to a private company will provide the company with the level of investment necessary to further develop its business while at the same time delivering what we believe is an attractive premium to shareholders."

The deal is expected to be completed in the first half of 2008.

Waste Industries stock (Nasdaq: WWIN) surged on the news, gaining $6.46, or 21.76%, to close at $36.15.

And that was the big news of the day. With uncertainty and trepidation roiling the markets, it appears that most players are willing to just run out the clock on the year.

"I think a lot of people are just going to sit on their hands until Jan. 1 or Jan. 2 and go from there," one market watcher said.

Equity markets took a jagged route to an up close, as fears of a recession wrestled with better-than-expected earnings from Goldman Sachs and electronics retailer Best Buy Cos. Inc. Those third-quarter earnings statements came with warnings of future problems, however.

The European Central Bank's lending of $500 billion to European banks provided some good news, while the announcement that new home starts in the United States reached a 16-year low provided some bad news. The seesaw continues.

The Dow Jones Industrial Average closed the day 65.27 points, or 0.50%, higher at 13,232.47.

The Nasdaq gained 21.57 points, or 0.84%, to close at 2,596.03.

The Standard & Poor's 500 closed Tuesday at 1,454.98, a gain of 9.08 points, or 0.63%.

"It's very difficult to interpret things that happen at times like this, coming up on an occasion," the market watcher said. "There's a lot of artificial stuff going on that accentuates the volatility."

Cherokee searches for answers

Van Nuys, Calif.-based clothing and apparel licenser Cherokee Inc. retained Goldman Sachs as its financial adviser after announcing that it was searching for "strategic alternatives."

The company said it was searching for ways to increase shareholder value, including a possible sale of the company.

Cherokee licenses and manages several clothing brands, including Cherokee, Sideout and Carole Little. The bulk of their products are sold in the United States through Target Corp. stores.

Cherokee stock (Nasdaq: CHKE) closed up $2.10, or 6.48%, on the day at $34.52.

United Rentals headed to court

Rumors swirled Monday that there would be a settlement in the court fight between United Rentals, Inc. and Cerberus Capital Management after the trial was delayed.

Well, that didn't happen. The trial opened Tuesday in Delaware and featured Cerberus's Stephen Feinberg on the witness stand.

United Rentals is suing Cerberus over the breakup of the private equity shop's takeover of the Greenwich, Conn.-based construction equipment renter. Cerberus broke off the $4 billion deal in November.

United Rentals stock (NYSE: URI), which rallied on the settlement rumors, fell $1.20, or 4.95%, to $23.05 Tuesday.

Pennsylvania OKs Manor Care deal

The Pennsylvania Health Department approved the sale of Toledo, Ohio-based nursing home operator Manor Care Inc. to private equity house the Carlyle Group on Tuesday.

Approval from the state had been somewhat in doubt after the Service Employees International Union opposed the deal.

Manor Care operates 46 nursing homes in Pennsylvania and around 500 in 33 states nationwide.

The company says only approval of regulators in West Virginia stands in the way of completing the $6.3 billion deal. The SEIU says the deal requires approval from regulators in eight other states.

Manor Care shares (NYSE: HCR) moved up $1.90, or 2.98%, to $65.70 on the day.

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