In Business This Week: Headliner
Thomas Van Weelden: Allied Waste Is Hauling It In
It has taken nearly 30 years, but Thomas Van Weelden is almost at the top of the heap. In 1971, the CEO of Allied Waste Industries began hauling trash in Chicago for his father. He started his own company in 1975, then merged it with Allied Waste, which he built up through a series of mergers.
On Mar. 8 came his boldest deal yet--a $9.1 billion bid for Browning-Ferris Industries, which would make Allied No. 2 to Waste Management. Apollo Advisors and Blackstone Capital, the top Allied shareholders, are partly financing the deal, taking $800 million of convertible preferred.
The deal will boost Allied's sales from $1.8 billion to $6.6 billion--and total debt to about $11 billion. Still, bankers expect asset sales of $900 million and $360 million in savings, and say cash-flow of almost $2.4 billion will be ample. "Where others see garbage, we see enormous cash flow," says Tony Ressler, a founding partner of Apollo.
For Van Weelden, 44, "garbage isn't sexy." But his outfit is cleaning up.By Steve BrullReturn to top
A Tug-Of-War over Lycos
CAN DAVID WETHERELL OUTSMART BARRY DILLER? The chairman of CMGI, known as a savvy Web investor, is locking horns with the media mogul over Lycos, the Web portal company that agreed on Feb. 9 to merge with Diller's USA Networks. Wetherell voted for that deal as a director of Lycos. But when some of the company's investors, who regarded the price for Lycos as too low, sent its shares into a tailspin, Wetherell announced that he was having second thoughts. The Internet financier opened direct hostilities against Diller on Mar. 9, when he resigned from Lycos' board and said that he would actively oppose the USA deal. Wetherell now says he'll hunt for new buyers, with the aid of Morgan Stanley Dean Witter. One possibility: CMGI, his investment company. Diller, who honed his corporate combat skills in the 1994 battle for Paramount, is not commenting.EDITED BY KELLEY HOLLANDReturn to top
Dupont Fights for Its Life Sciences
DUPONT SAYS IT'S GETTING SERIOUS ABOUT THE LIFE-SCIENCE BUSINESS. On Mar. 10, the chemical giant announced plans to create a tracking stock for its pharmaceutical and agriculture business. The company figures that such a move will help those units reach a higher valuation on Wall Street. At the same time, DuPont said it was seeking alliances to build up its pharmaceutical business. But not everyone was impressed with the move. HSBC Securities analyst Paul Leming thinks that DuPont should be moving more quickly to build the life-science operations. "They take forever to get things done," Leming says.EDITED BY KELLEY HOLLANDReturn to top
Let Your PC Do the Phoning
THE AVERAGE JOE WITH A COMPUTER WILL SOON BE ABLE TO CALL HOME VIA THE INTERNET. On Mar. 10, Netscape Communications announced that Navigator 5.0, the next version of its popular Web browser due out this summer, will include Internet phone service. Navigator could give Internet telephony a considerable boost, if users of the Netscape browser--now installed on 50 million PCs--take advantage of the new feature. With the click of a mouse, users will be able to place calls in the U.S. over a system developed by the Hackensack (N.J.) phone company IDT for as little as 4.9 cents a minute.EDITED BY KELLEY HOLLANDReturn to top