Shanks asks for 10 per cent more after offer

David Hellier
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WASTE management firm Shanks Group revealed a &pound;536m buyout approach yesterday, sending its shares soaring, but said its board and key shareholders were looking for at least 10 per cent more. <br /><br />Shanks did not name the company behind the approach but a person familiar with the matter said it was the Carlyle Group, the well-connected US investor that is one of the world&rsquo;s biggest private equity firms. Carlyle already owns UK companies such as Britax, the childrens&rsquo; car seat maker, Talaris, a cash systems group and Ensus, a bio-ethanol producer.<br /><br />Shanks said the &ldquo;highly preliminary and unsolicited&rdquo; approach valued it at 135p per share. <br /><br />Shanks said it had held &ldquo;supportive discussions&rdquo; with its two biggest shareholders -- Legal &amp; General and Schroders, and believed an offer of 150p or more a share would be appropriate. <br /><br />Under chief executive Tom Drury, a former United Utilities director, Shanks has cut its debt through a rights issue and disposals, and sharpened its focus on recycling, organic waste treatment, and the UK Private Finance Initiatives (PFI). <br /><br />Shanks cut core net debt -- which excludes non-recourse debt taken on by Private Finance Initiative projects &ndash; to &pound;198m at the end of the year. <br /><br /><strong>NAME: JAMES LUPTON<br />GREENHILL</strong><br />James Lupton, who helps to run the London arm of Greenhill, a Wall Street boutique investment bank, thought up the idea of telling Carlyle to come up with an offer of 150p. &ldquo;I felt it was the right thing to do,&rdquo; Lupton told City A.M. yesterday of his unorthodox idea.<br /><br />Lupton, who made the Sunday Times Rich List by virtue of his large stake in Greenhill, won the Shanks account more than two years ago after chairman Adrian Auer asked Greenhill to pitch to the board.<br /><br />Joint brokers to Shanks are Investec and RBS while Merrill Lynch is advising Carlyle Group.