Hands holds on to agree Waste Recycling takeover

Guy Hands landed his first deal yesterday since leaving the investment bank Nomura and striking out on his own after Waste Recycling Group agreed to a takeover bid valuing the company at £531m.

Terra Firma, the £1bn buyout fund set up a year ago by Mr Hands, is paying £315m for the shares in Waste Recycling, one of the country's biggest waste management companies, and taking on a further £216m in debt.

The deal, worth 267.5p a share, will net £144m for Waste Recycling Group's 45.5 per cent shareholder Kelda, the owner of Yorkshire Water.

Kelda said it planned to return £74m of the cash to its own shareholders and use the remaining £70m to reduce group debts.

Mr Hands entered into exclusive negotiations to buy Waste Recycling in late March but it had appeared that the deal might have slipped through his fingers after last week's deadline for signing a deal passed without agreement being reached.

He had originally offered to pay not less than 285p a share but the price came down as the negotiations wore on.

Had the deal collapsed then Waste Recycling's share price would probably have fallen to below 200p.

The offer of 267.5p a share represents a 21 per cent premium to Waste Recycling's share price the day before it disclosed it was in takeover talks and a 34 per cent premium to its price before bid rumours began to circulate in the markets.

The existing management of Waste Recycling, led by its executive chairman, James Newman, are expected to stay with the company.

Mr Hands pledged that he would bring the "greatest possible operational and strategic focus" to the company.

Sources close to Mr Hands played down suggestions that he would use the takeover to launch a bid to consolidate the UK waste management industry, which is facing a leaner period because of the economic downturn and increasing environmental burdens.

Waste Recycling currently operates 59 landfill sites and 21 waste transfer and recycling facilities and 50 per cent of its £300m turnover comes from municipal waste contracts.

It also has an energy from waste business with a capacity of 100 megawatts.

Mr Hands has until 17 August to close the deal. Should Waste Recycling or Kelda accept a higher rival offer then they will have to pay Terra Firma break fees of £3.15m and a maximum of £6m respectively.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific