Waste Management Giant GFL Is Surging Over 10% Overnight: What’s Driving Up The Mid-Cap Stock?

• According to a Bloomberg report citing people familiar with the matter, KKR & Co., Energy Capital Partners and Blackstone Inc. are looking to bid together to take over the waste management company. 
• Meanwhile, Brookfield Asset Management (BAM) and IFM Investors are also teaming up for a rival bid. 
• GFL’s special committee is likely to take time to evaluate the proposals, and it may ask bidders to improve their offers, the report noted. 

Shares of GFL Environmental Inc. (GFL) surged more than 10% in the overnight session late Wednesday after a media report that some of the world’s largest infrastructure companies are bidding to take over the environmental services company. 

According to a report from Bloomberg, which cited people familiar with the matter, KKR & Co. (KKR), Energy Capital Partners and Blackstone Inc. (BX) are looking to bid together to take over the waste management company, while Brookfield Asset Management (BAM) and IFM Investors are teaming up for a rival bid. 

Energy Capital and Blackstone declined to issue comments to Bloomberg, while GFL, KKR, Brookfield and IFM did not immediately respond to requests for comment, the media agency said in its report.

GFL: What’s The Deal Timeline?

A decision could be made in the coming weeks on what could be one of the year's largest leveraged buyouts, according to Bloomberg. The sources said no final decision has been reached and that the timeline could change, while additional bidders could enter the process or the existing consortiums could be reshuffled. 

Meanwhile, GFL’s special committee is likely to take time to evaluate the proposals, and it may ask bidders to improve their offers, the report noted. 

The company formed a special committee in July to oversee potential merger or take-private discussions following preliminary takeover interest. CEO Patrick Dovigi, who helped build GFL before taking it public in 2020, said at the time that he would roll his entire stake into any potential deal, a structure commonly associated with leveraged buyouts.

GFL is one of North America’s largest waste-management companies, employing about 15,000 people across the U.S. and Canada and operating recycling facilities, transfer stations and landfills. It has a market capitalization of nearly $18 billion as of the last close.

GFL CEO Says He Will Continue To Helm The Company

GFL Environmental CEO Patrick Dovigi said in an interview with Bloomberg Deals TV that he intends to continue at the helm of the company and hold on to his ownership irrespective of the strategic outcome.

“I just feel really good about where the company is,” Dovigi said, adding that he does not plan to step away from a company he has led for nearly two decades. He also described GFL as being only in the “third inning” of its development and reiterated his confidence in the company’s outlook, saying it was “very exciting times” for GFL. 

GFL Stock: Are Retail Traders Keyed In?

On Stocktwits, the stock’s following has jumped by over 11% in the past 12 months, with retail sentiment rising to ‘bullish’ from ‘neutral’ over that period.

“$GFL we could see a buyout this week before Fed hikes rates so the acquirers can take out fixed rate debt at lower rates,” a user had said earlier in the week. 

GFL stock is up nearly 4% so far this year. On Koyfin, it has a consensus ‘Buy’ rating among 21 analysts covering the stock and an average price target of $52.63, implying it is currently trading at a 28% discount to fair price. 

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