In order to “allow further time for discussions with potential financing providers to conclude”, the deadline has now been pushed back again to 27 September.
This will be the third time the PUSU deadline has been extended, after similar announcements in July (see letsrecycle.com story) and in Biffa’s 2021/22 financial results (see letsrecycle.com story).
Takeover
Biffa announced in June that it was subject to a series of unsolicited takeover bids from Energy Capital Partners, which it was minded to accept if the valuation of £1.4 billion was met.
In the announcement then, Biffa set a PUSU deadline of 5 July as stipulated by the UK Takeover Panel regulations. This gave ECP around a month to announce whether or not it will be making a firm offer for the company.
Discussions have been ongoing since, with the issue of an ongoing HMRC landfill tax enquiry which could be worth ip to £150 million at the centre of the discussions.
In its 2021/22 financial results, Biffa set aside £20 million and accounted for the money before hearing back from HMRC, a process which “is expected to continue for some time”.
It explained that HMRC’s concerns are “primarily relating to the interpretation of the qualifying fines regime set out in Landfill Tax1”.
HMRC also raised concerns, Biffa said, “over the potential conduct of Biffa and specific customers, which may have led to the incorrect rate of Landfill Tax being paid”.
There can be no certainty either that an offer will be made nor as to the terms of any offer
- Biffa board
Discussions
In today’s announcement, Biffa reiterated that it is “continuing discussions” with Energy Capital Partners in relation to a potential acquisition of Biffa.
It again said “there can be no certainty either that an offer will be made nor as to the terms of any offer, if made.”
The company added: “ECP has requested an additional 28 day extension to the PUSU deadline in order to allow further time for discussions with potential financing providers to conclude. The board of Biffa has agreed to that request, and the Panel on Takeovers and Mergers has consented to a further extension to the PUSU Deadline.”
All eyes will now be on further announcements on the discussions, and whether ECP considers the £20 million provision to be sufficient to progress with the takeover at the current price.
While Biffa has estimated that the cost could cost anywhere between £170,000 and £168 million, anything towards the top end could eat into ECP’s margins when it comes to sell Biffa at a later date.
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