Shanks ends buyout discussions with Carlyle

The UK-based waste management company said a ‘final price indication’ of 120 pence per share was too low.

London-listed waste management company Shanks Group has ended its discussions with The Carlyle Group over a possible buyout offer, according to a statement.

Shanks said at a meeting Monday Carlyle made a final price indication of 120 pence (€1.32; $1.80) per share in cash for all the equity of Shanks, an offer which the board of Shanks was “unwilling to recommend at such a level” to its shareholders.

“The board’s response to the approach from Carlyle has always been about price,” Adrian Auer, chairman of Shanks, said in a statement. “Carlyle has failed to offer a price which (in the view of the board) properly reflects the value of the group.”

Originally, Carlyle, which was seeking to buy Shanks using capital from its €5.4 billion Carlyle Europe Partners III fund, made a preliminary indication that it would be willing to do a deal at 135 pence per share in cash. No actual buyout offer was ever made, but Carlyle’s initial price indication valued Shanks at around £536 million.

It is unclear why Carlyle lowered its price indication between its initial approach last year and this week’s final indication.

Shanks is a UK-based provider of recycling, organic processing and private finance initiative waste management services. It is active in the UK, Belgium, Netherlands and Canada.

Shanks shares traded yesterday up more than 4 percent on the news, closing on 102 pence per share. Today the company’s shares were at 108 pence per share at press time.