Shanks walks away from buyout talks

WASTE management company Shanks has ended talks about selling itself to buyout firm Carlyle after rejecting a 120p per share indicative cash offer as too low.
By The Newsroom
Published 9th Mar 2010, 08:19 BST
Updated 9th Mar 2010, 08:23 BST

"Carlyle has failed to offer a price which in the view of the board properly reflects the value of the group," Shanks chairman Adrian Auer said in a statement.

Shanks said it was confident of its longer term prospects, despite "challenging" trading conditions across the European waste management industry.

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Shares in Shanks slumped 20 per cent to 96.5p following today's news.

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 based in the west of Scotland. It has UK offices in Lochgilphead in Argyll, Milton Keynes, Southampton, Pontypool, Rainham in Essex and Glasgow.

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

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."