Shanks set to open its books to Carlyle

WASTE management company Shanks is set to agree to open its books to suitor US private equity firm Carlyle Group, it emerged yesterday, as a takeover battle brewed for the firm.

Shanks is expected to sign an agreement with Carlyle later this week, allowing the US firm to see its accounts after its £536m offer, an industry source said.

The agreement is not expected to be exclusive, meaning other potential bidders could also gain access to Shanks’ books.

Carlyle is talking to Shanks after making a 135p per share offer for the UK group last week.

While it did not reject Carlyle’s approach, Shanks has left the door open to other offers by saying a bid of at least 150p per share would be “appropriate”.

Other firms are believed to be waiting in the wings with rival bids, with US firm Covanta said to have contacted Shanks’ investment banking adviser Greenhill & Co late last week to express interest.

Waste management firm Sita UK, part of France’s Suez Environment, Dutch waste company AVR -- which is owned by private equity outfits KKR and CVC Capital Partners – and Guy Hands’ private equity group Terra Firma are all reportedly interested.

Shanks remained tightlipped. “I’m not going to comment on market speculation,” a spokesman said.

Under chief executive Tom Drury, a former United Utilities director, Shanks has cut debt and sharpened its focus on recycling, organic waste treatment, and the UK Private Finance Initiative (PFI).