But the deal immediately ran into trouble when Western Resources, the Kansas-based power utility that owns 23.4 per cent of ADT, said it had not been consulted.
"We are not familiar with the details at this point, and we have no opinion on the terms," a Western spokeswoman said.
In a joint statement Republic said the merger was meant to be tax-free to ADT's shareholders and would be accounted for as a pooling of interests. Under its terms Mr Ashcroft will become a member of Republic's board of directors and remain chairman and chief executive of ADT. ADT shareholders will receive 0.92857 ordinary shares in Republic for each ADT share held and ADT will become a wholly owned subsidiary of Republic.
The exchange ratio was based on a price of $26 per share of ADT common stock. The terms of the agreement already were approved by the two boards, the companies added.
ADT also issued Republic a warrant to acquire 15 million of its shares at an exercise price of $20, which is exercisable if the deal is terminated for any reason.
Republic operates in the electronic security, waste management and automotive industries . It is run by Wayne Huizenga, who became chairman and chief executive last year after selling the Blockbuster video stores group to US media and entertainment giant Viacom
News of the Republic deal sent shares in ADT, which are listed in both London and New York, soaring 395p to pounds 15.50 while shares in another Automated Security Holdings (ASH), a rival electronic security which is the subject of a bid from ADT, rose 8p to 45p.
Last night ADT insisted its proposed acquisition of ASH will go ahead as planned.
Two weeks ago it bid pounds 84.9m for loss-making ASH, the troubled burglar alarms group. ADT said the deal, involving three of its shares being swapped for every 92 held in ASH, would make it market leader for electronic security in the UK and southern California. It is already the largest single provider of electronic security in North America and is also a significant force in Europe. In November ADT raised pounds 222m from the sale of its European car auctions business to concentrate on electronic security. The ASH deal is expected to become effective before its merger with Republic, and ASH shareholders will still receive common shares in ADT to settle the deal.
Under Mr. Ashcroft's aegis ADT was transformed from a low-margin office services company into a leading electronic security and car auction group. But the onset of recession left ADT saddled with debts of $1.3bn and raised concerns about the opaque nature of its accounts. Confidence among investors drained away and from a peak of more than pounds 20 in 1989, the shares crashed to less than pounds 3 in little over two years.Reuse content