Waste management specialist Biffa said on Tuesday that it has given the green light to a proposed takeover approach worth more than £1bn.
The FTSE 250 firm said it had received a series of unsolicited, indicative proposals from affiliates of Energy Capital Partners, the private equity firm, and following talks, a possible cash offer of 445p per share has been proposed.
Due diligence is now underway, and Biffa said it was “minded to recommend” the approach to shareholders should a firm offer be made on the same financial terms.
The offer values the business at around £1.36bn. Shares in Biffa closed at 325p per share on Monday, giving it a market value of £924.9m.
Biffa, which is being advised by Rothschild & Co, said the offer was based on the current and likely future value of the business. It also made allowances for the “various risks” the company faces, including ongoing discussions between Biffa and HM Revenue and Customs over a landfill tax enquiry.
The probe centres around HMRC’s concerns that waste across the industry has been misclassified, and is therefore being assessed on “certain aspects” of its landfill tax compliance. Biffa said it strongly refuted HMRC’s concerns and that it was co-operating fully with the enquiry.
The company also briefly updated on trading, noting that it continues to trade “well” and that the underlying performance remained in line with expectations.
Biffa was due to post full-year results on 16 June, but that has now been pushed back to 28 June, in light of the proposed takeover offer.
