Tuesday, 8 December 2009

Shanks demands higher price after £535m bid

Elizabeth Judge
Shares in Shanks Group, the waste management company, jumped 39 per cent after it hoisted a "for sale" sign following a £536 million takeover approach.
The group revealed today that it had received a135p-a-share offer, from Carlyle, the US private equity group. While it said that the offer was "preliminary and unsolicited", it declared itself open to a bid of 150p-a-share. Shares rose 35.9p to 126p after the announcement.
It said that, after talks with its two largest shareholders, it had decided that the 150p figure would "deliver appropriate value to shareholders".
Shanks, which is Europe's largest quoted waste management group, has shifted in recent years away from landfill towards recycling and generating power from waste materials.

It sold its English landfill business to Guy Hands, the private equity tycoon, in 2004 and now works with the private and public sector to recycle and reprocess waste.
Earlier this year, it begun building its first anaerobic digestion plant, capable of generating enough renewable electricity to power up to 3,000 homes.
The £8 million plant, in Scotland, will take waste food from Scottish homes and hotels and from restaurants and retailers in Edinburgh and Glasgow.
The company, which recently unveiled a 24 per cent slide in half-year profits, has operations in the Netherlands and Belgium and is eyeing Canada.
It has been hit hard by the recession as reduced GDP relates to lower waste production.
However analysts said that its longer-term attractions include increasingly punitive measures on both sides of the Channel to divert waste from landfill towards recycling and waste-to-energy schemes.
The 135p-a-share offer represents a 49.8 per cent premium to Friday's closing price of 90.10p.
Consolidation in the industry has been underway for some time. In recent years Biffa, the waste business demerged from Severn Trent and Cory, have both been acquired by private equity groups.
Biffa was taken over by Montagu Private Equity, HBOS Fund Investments and Global Infrastructure Partners, in Europe's fourth-biggest deal of 2008.