GFL Environmental Inc. and Secure Waste Infrastructure Corp. have secured shareholder approval for their planned merger, overcoming opposition from investor Abrams Capital Management, according to sources familiar with the vote.
Shareholder Vote Details
Approximately 80 percent of eligible shareholders cast ballots ahead of Wednesday's special meeting. Roughly 140 million shares were voted in favor, while about 35 million were against. The sources requested anonymity as the final tally has not been publicly released yet.
Impact of the Merger
The approval clears a major hurdle for the US$6.4 billion acquisition, which will expand GFL's footprint in Western Canada and combine two large waste-management and infrastructure businesses. GFL has stated that the acquisition will strengthen its infrastructure network across Western Canada while improving scale and free-cash-flow generation.
Under the agreement announced in April, Secure shareholders can elect to receive $24.75 per share in cash, 0.4195 of a GFL subordinate voting share, or a mix of cash and stock, subject to proration. Secure investors are expected to own about 16 percent of the combined company once the transaction closes.
Opposition and Proxy Advisors
Abrams Capital, which owns about 22 million Secure shares, had urged investors to reject the deal, arguing that the Calgary-based company had stronger long-term potential as a standalone business. However, the campaign was dealt a setback after two influential proxy advisory firms—Institutional Shareholder Services and Glass Lewis—sided with management by recommending shareholders approve the merger.
ISS stated there was insufficient evidence to conclude the valuation was not credible, despite the absence of a formal auction process. Glass Lewis similarly concluded that the offer appeared close to Secure's fully marketed control value under current market conditions.
The merger still requires regulatory approvals before it can be completed.
