The waste management firm, which is in the top 250 companies on the FTSE index, was forced to make a statement following a 10% leap in the value of its stock yesterday.
The statement read: “Waste Recycling Group has noted the recent increase in its share price. The Board of WRG announces that following an approach, it is in discussions which may or may not lead to an offer for the Company. A further announcement will be made in due course.”
The identity of the interested party is still shrouded in secrecy. However, sources have denied reports that the buyer is the Kelda Group.
Leak
WRG has denied that there was any kind of leak concerning its discussions with the buyer, which led to a price rise of around 21.5p per share to 2.21. However, the company admitted that its statement was made “just in case”.
“When a party wants to buy a company on the stock exchange, sometimes it does start buying up available stock, and this could have had an effect on the price of the shares,” financial spokesman Trevor Phillips explained.
However, financial experts linked to WRG felt that the price rise was anything to do with a party buying up WRG stock to put it in a stronger position in the buy-out talks.
The suggestion was made that since the value of WRG stock had fallen by a substantial margin over the last two months, that brokers viewed the shares as a “bargain”. One analyst told letsrecycle.com: “Since the value of the stock is so low at the moment, even small amounts of share purchases could have a substantial effect on the value, which drew the interest of the stock exchange regulator and is why this statement had to be made.”
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