The asset manager Macquarie has launched a £700m offer to buy the waste management company Renewi in the latest takeover of a London-listed firm.
The two companies have reached a preliminary agreement on the financial terms of a deal that values Renewi at 870p a share, a 57% premium to its closing price of 554p on Wednesday night.
In a joint statement, they said the terms of the deal were final, and Renewi had agreed to provide Macquarie with access to its books so confirmatory due diligence could be conducted.
The agreement comes a year after Macquarie was thwarted in an attempt to take over Renewi, when an offer worth 810p a share was rejected.
Renewi, formerly known as Shanks Group until a 2017 rebrand, sold its UK municipal bin-collecting business to the rival Biffa earlier this year.
It now operates in Belgium, the Netherlands, France and Portugal, and says it converts most of the waste it collects into “circular materials”, which it sells to its customers via the circular economy.
Macquarie, which has been criticised for its stewardship of Thames Water when it was a shareholder, has pledged to “maintain a prudent and sustainable leverage structure” at Renewi, and to safeguard employees’ rights.
Shares in Renewi soared by 43%, the top riser on the FTSE 250 index, after the agreement was announced. That followed a surge in the shares of the car insurance company Direct Line, which gained 41% after rejecting a takeover approach from Aviva.
Renewi said its board “remains confident in Renewi’s prospects as a pure-play market leader in Europe’s most advanced recycling markets. The board is also confident in Renewi’s strategy and execution plan to deliver a step-change in margins and cashflow.
“That said, the board has also carefully balanced the likely value creation from the continued delivery of Renewi’s strategic plan against the various risks faced by Renewi, the strong value crystallisation in cash at a meaningful premium to the current Renewi share price and the views of Renewi shareholders.”
Renewi added that Macquarie’s offer was at a level its board “would be minded to recommend” to shareholders if a firm offer was made.
