CVC gives up on Biffa as rivals consider joint bid
Saturday 23 February 2008
The private equity giant CVC Capital Partners has walked away from a take-over bid for the waste management group Biffa, which accepted a £1.2bn offer this month. This comes as two suitors have held talks about teaming up for a counter bid.
A source close to CVC said the group had been looking at Biffa in early February, but added: "We are no longer involved."
CVC, which is understood to be considering a move for the pub group Mitchells & Butlers, declined to comment yesterday.
This comes as rival Terra Firma, the buyout group that owns EMI, has been in discussions with the French industrial and services company Suez over the possibility of a joint bid for Biffa. Both declined to comment.
The UK waste management group recommended a 350p-per-share offer from a consortium of Montagu Private Equity, Global Infrastructure Partners and UCIL on 8 February.
It added at the time that it had "also received approaches from third parties regarding their potential interest in making an offer". Later that day it emerged that Terra Firma, CVC and Suez were all considering individual approaches.
A source close to Macquarie, which was also linked to a bid, distanced the Australian group from the speculation.
Biffa declined to name the suitors but said they would be given the same access as the recommended consortium. It is understood that Terra Firma and Suez have since had access to the data rooms.
Any rival bid is expected to be tabled before 3 April, which is the last day of dealings for shareholders to accept the consortium's bid. One source close to the deal said it could happen in the next few weeks. "A rival would probably want to bid before 12 March, which is the initial court meeting for the bidder's scheme of arrangement," he added.
The Biffa takeover saga was sparked when Montagu, a buyout group spun out of HSBC in 2003, and HG Capital first announced their interest in November. Biffa had been constantly rumoured as a takeover target since it was spun out of Severn Trent in 2006.
The UK waste group re-jected the consortium's original 330p-per-share bid in November. The consortium returned to the table the following month with its improved offer.
The offer had been thrown into confusion the same month when HG pulled out after concerns over the deal's structure. Global Infrastructure Partners, owned by the giant conglomerate General Electric, stepped in and was joined by the HBOS subsidiary UCIL.
An analyst at Seymour Pierce said this month that the 350p-per-share bidwas a start but "400p was more realistic".
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