views

Shanks walks away from its takeover talks with Carlyle

RHIAN NICHOLSON
INTERACTIVE INVESTOR

SHARES in waste management group Shanks slumped by as much as 20 per cent yesterday after it pulled out of takeover talks with US private equity group Carlyle.

The FTSE 250 group says it is unwilling to recommend a final price of 120p cash per share to shareholders, claiming the £475m offer undervalues the company and its prospects.

Adrian Auer, chairman of Shanks, said the board’s response “has always been about price”.

“Although the timing of their approach was not of our choosing, we have engaged fully and professionally, but Carlyle has failed to offer a price which – in the view of the board ?– properly reflects the value of the group,” he added.

Back in December Shanks announced it had received an unsolicited approach from Carlyle for a potential cash offer of 135p a share. This would have valued the group at more than £530m.

Carlyle is understood to have lowered its offer after Shanks said, at the beginning of February, its annual results would be “slightly below previous expectations”.

But the Shanks board still held out for a bid of 150p a share.

Shares in the waste management company closed down 18p at 102p.