Waste Management, Inc. (NYSE: WM), a major player in the waste disposal industry, has announced its intention to acquire Illinois-based Stericycle (NASDAQ: SRCL) for about $7.2 billion. This considerable deal sees Waste Management offering $62 per share in an all-cash transaction, incorporating Stericycle’s existing net debt of approximately $1.4 billion. The acquisition price represents a 24% premium over Stericycle's 60-day volume-weighted average price as of May 23, just before speculations of a potential sale bolstered by Bloomberg's report on Stericycle's review of takeover interests.

The agreement between Waste Management and Stericycle has received unanimous approval from the boards of directors of both companies. It is anticipated to finalize as soon as the fourth quarter of 2024, subject to regulatory approvals and customary closing conditions. Following the acquisition's disclosure, Stericycle’s shares experienced a 15% increase, whereas Waste Management's shares saw a decline of over 2%.

However, this corporate move has raised questions about the fairness of the deal price for Stericycle shareholders. Johnson Fistel, LLP, a notable shareholder rights law firm, has launched an investigation into whether Stericycle's board members breached their fiduciary duties during the negotiation process with Waste Management. The inquiry aims to determine if Stericycle's board failed to seek alternative deal options or to secure the most advantageous sale price for its shareholders, especially in light of an analyst's price target of $75 for Stericycle stock and expected increases in earnings and revenue.

Johnson Fistel encourages Stericycle shareholders to come forward to discuss their legal rights, hinting at possible legal action to ensure that the board of directors fulfills its obligations toward the company's investors.

This significant acquisition highlights Waste Management's strategy to expand its footprint in the waste disposal sector and comes amidst the backdrop of both companies preparing for the anticipated close of the deal by the end of 2024. The merger promises to bring about operational efficiencies and broaden the services offered by Waste Management, but it also puts a spotlight on the responsibilities of corporate boards to ensure fairness and transparency in such large-scale transactions. Shareholders and industry watchers alike will be keenly observing how this deal further unfolds, especially in light of the legal scrutiny it has attracted.