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Rivals drop challenges to Biffa's £1.2bn takeover deal
Nick Goodway, Evening Standard25.02.08
Shares in waste management group Biffa dropped 23p to 345p today, as it ruled out the chances of a counterbidder coming in to bust up its agreed £1.2 billion takeover by private equity.
Terra Firma, the private-equity firm run by Guy Hands, last week attempted to put together an offer with French industrial group Suez to launch a bid worth up to £1.5 billion.
But it is believed the two could not come up with a structure to compete with the agreed offer from Montagu Private Equity and Global Infrastructure Partners.
Their vehicle, Bidco, has always led the running for Biffa and received the board's recommendation for a 350p-a-share offer at the start of this month. At the same time the waste group also said it had received interest from unnamed third parties who had been given the same access to its books.
Today Biffa said: "The board has now been informed by those third parties that they are no longer working towards making a competing offer for Biffa."
Investors had hoped that Terra Firma and Suez might have offered as much as 380p to 390p a share.
Suez was keen to combine Biffa's rubbish collection and waste treatment business with its own SITA, which already collects rubbish from 12 million people in the UK.
Hands, by contrast, was particularly interested in Biffa's landfill gas sites which would fit his Infinis renewable energy business.
Biffa was demerged from Severn Trent in October 2006 when its shares began trading at 260p.
But after a series of disappointing profit announcements last year its shares plunged from a 2007 high of 345.5p to just 214p, leaving the door open to bidders.
