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UK waste specialist Biffa accepts cut-price Energy Capital Partners buyout offer

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UK waste management major Biffa has accepted a cut-price buyout offer from US private equity firm Energy Capital Partners amid the pound crashing to its lowest ever level against the dollar.

ECP had made a 445 pence per share approach in June, but Biffa has now recommended that shareholders accept a revised 410 pence per share offer, valuing the business at about £1.3bn.

Biffa’s shares were trading at about 325 pence each on the day before the June bid, and spiked today from 317 pence each to reach 408 pence per share on the back of the news.

Company chairman Ken Lever said, “It is the Biffa Board’s view that this offer represents a compelling opportunity, particularly in a weakening economic environment, for shareholders to realise, in cash and with certainty, the potential for future value creation.”

A statement from ECP said, “Given generally supportive but uncertain public policy in the waste management sector, ECP believes that Biffa requires patient, sustained capital investment predicated on a long-term investment horizon.”

Biffa was previously owned by Montagu Private Equity and Global Infrastructure Partners following a take-private deal in 2008. It relisted on the London Stock Exchange in 2016.

ECP closed its fourth fund on $3.3bn in 2020, below the $5bn it collected for Fund III in 2014. The firm added at the time of the Fund IV close that it had also raised $3.5bn for co-investment opportunities over the previous couple of years, the majority of which was for its landmark $17bn take-private acquisition of Calpine Corporation.

The firm raised $2.25bn for its debut fund in 2006, before going on to amass $4.34bn for Fund II four years later.

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