Republic Services will retrench this week to weigh a sweetened takeover bid from top waste hauling industry rival Waste Management, after calling the initial offer an opportunistic attempt to disrupt its deal to buy the industry's second-largest company, Allied Waste (NYSE: AW - News) .

The agreement with Allied bars Republic from holding talks over a different deal or providing another party with financial information unless its board of directors determines that a competing proposal is superior - or could potentially lead to a superior transaction.

In mid-July, Republic's board unanimously voted that it did not expect Waste Management's first proposal to lead to a better outcome for shareholders than its deal to buy Allied.

Republic said it was not for sale and that Waste Management's $34-per-share cash bid included too much regulatory risk and undervalued the company.

Waste Management's decision to bump its bid to $37 a share, which values Republic's equity at $6.73bn, appeared to underwhelm Republic's shareholders, who pushed the company's share price down by a fraction of a per cent on Monday to $34.75 by mid-day.

Republic has cited concerns over the stance US antitrust regulators would take on a deal between it and Waste Management.

Waste Management attempted to address some of those concerns in its new proposal by pledging to pay Republic $250m if regulators nix the deal, and to pay a rate of interest on top of its per-share bid if the transaction takes a lengthy period of time to close.

Waste Management also said it was "clear that financing is available" for its proposal, but offered no details on terms and said it had not yet executed commitment letters with banks.

Republic's board will have to determine whether such assurances are worth the risks it could run, both to the Allied deal and its own business, by opening its books to a formidable rival.

The company's board will hold talks with its advisers this week over whether the new proposal could represent a better path for shareholders.