In a statement earlier, Beauparc owner Macquarie said it is submitted the offer of 775 pence per Renewi share, which it said was a premium of approximately 52%.
However, this was rejected by the Renewi board, with a statement from the company saying: “The board considered the proposal in detail and believes it fundamentally undervalues the value of Renewi and its prospects, and following due consideration it was rejected this morning.
“The board of Renewi strongly urges shareholders to take no action at this time. A further announcement will be made when appropriate.”
Macquarie has been keeping a close eye on the UK waste sector after its acquisition of Beauparc, through which it also owns B&M Waste Services, Acumen and Mid UK Recycling, among others.
The company agreed a deal with Veolia for Suez UK last year, when the UK’s Competition and Markets Authority had ordered Veolia to sell Suez UK over fears it would lower competition (see letsrecycle.com story).
Macquarie explained in its statement that the bid for Renewi provides a “compelling opportunity for Renewi’s shareholders to realise their investment for cash at a very significant premium and at an attractive multiple”.
Renewi, which was formed in 2017 following the merger of Shanks and the Van Gansewinkel Group, operates in six countries and runs 24 waste treatment facilities for UK councils. This includes East London, Wakefield and Barnsley/Doncaster/Rotherham.
The company is a huge player in the Benelux region and has been calling for clarity on policy in recent months to allow it certainty to invest in recycling infrastructure in the UK.
Macquarie added in its statement that in “a challenging macro and cost of capital environment, it believes the proposal represents an attractive alternative for shareholders, attributing a full and fair valuation for the company’s future potential”.
Macquarie has urged the Renewi board “to engage constructively to agree the terms of a recommended transaction to be put forward to Renewi’s shareholders”.
It also also noted the “difficult macroeconomic environment, which is impacting different sectors including waste management, and the impact of such an environment on the value of the company.”
Macquarie also said it is “fully supportive of Renewi’s strategy to be the leading waste-to-product company and a key contributor to the development of a circular economy”.
However, it warned this strategy is “not without risk and requires additional capital to implement”.
Macquarie will support further investments to deliver on key objectives
Macquarie concluded in its statement about the offer for Renewi: “As one of the largest owners of waste management assets globally, Macquarie is well placed to support Renewi in the delivery of its strategy by applying operating excellence and learnings from a breadth of companies.
“Macquarie will support further investments to deliver on key objectives of the business, including recycling targets and circular economy commitments, and ensure Renewi is well positioned to support the delivery of regulatory targets.”