UK waste management company rejects Carlyle's bid

According to Shanks, Carlyle first approached it about a possible sale in October 2009, going on to give a final cash offer of 120 pence per share for all issued share capital. Shanks board members subsequently met and decided to reject the bid.

Shanks said that it remains committed to its three principal growth areas of recycling, organic processing and UK PFIs, but admitted that European trading conditions for the waste management industry are difficult as a result of a weak macroeconomic environment. The company claimed, however, that improved operational balance sheet gearing and a strengthened management team positions the group for stronger medium-term growth.

Adrian Auer, chairman of Shanks, said, “The board's response to the approach from Carlyle has always been about price.  Although the timing of their approach was not of our choosing, we have engaged fully and professionally, but Carlyle has failed to offer a price which - in the view of the board - properly reflects the value of the group.  

“Shanks is a well-managed group with good strategic positioning in the evolving European waste markets and the board is confident that the group can deliver attractive growth in shareholder value over the medium term,” he added.

Shanks is Europe’s largest listed independent waste management company, with operations in the Netherlands, Belgium, UK and Canada.

Shanks’ share price nosedived on news of the deal falling through. The company was trading at 120.4 pence per share as the markets closed yesterday, and opened today at 98 pence per share. Shares last traded at 102.35 pence.

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