Shanks rejects £475m bid offer

Waste disposal group Shanks yesterday said it had walked away from takeover talks after rejecting an offer proposal valuing it at £475m.

The long-running discussions with private equity firm Carlyle collapsed after the US company reduced its indicative price to 120p a share, from the 135p a share or 535.6m proposed in October.

The lower price comes a month after Shanks told shareholders that it expected full-year trading results to be slightly below its expectations. Shanks had earlier valued itself at 150p a share, or 595m.

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A successful takeover would have made Shanks the UK's third waste management group to fall into private equity hands in recent years, following the buy-outs of rivals Cory and Biffa.

Milton Keynes-based Shanks, which employs 4,500 staff, has three key areas of work – recycling, converting waste into energy and Private Finance Initiative (PFI) contracts.

The company was formed in the late 1880s as a construction company in the west of Scotland. It has UK offices in Lochgilphead in Argyll, Milton Keynes, Southampton, Pontypool, Rainham in Essex and Glasgow.

Shanks chairman Adrian Auer said Carlyle had failed to offer a price which "properly reflects the value of the group".

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He added: "Shanks is a well-managed group with good strategic positioning in the evolving European waste markets and the board is confident that the group can deliver attractive growth in shareholder value over the medium term."

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