One of the country’s leading waste management groups has confirmed that a private equity firm has launched a multi-billion dollar bid to take over the business.
Waste management company Bingo Industries has announced that it is considering a $2.3 billion takeover bid from an Australian private equity group.
In an update to the Australian Stock Exchange on Tuesday, Bingo confirmed media reports that CPE Capital and a consortium of investors had been approached to acquire the company at a proposed $3.50 per share.
The consortium comprises the Macquarie Group’s infrastructure arm, Macquarie Infrastructure and Real Assets.
CPE’s offer of $3.50 per share is a premium to Bingo’s Monday trading price which closed at $2.74 per share. Its current market capitalization is approximately $1.8 billion.
Bingo operates waste disposal centers and over 300 orange-branded trucks in Melbourne and Sydney.
Bingo shareholders have suffered significant fluctuations in the value of their shares since the company listed on the ASX in May 2017.
In February 2019, the stock price fell to $1.17 each after Bingo cut its profit forecast by almost 20%.
When financial markets crashed in March last year after the onset of the coronavirus pandemic, Bingo’s stock value fell to a low of $1.82 per share.
The company also noted that an alternative certificate offer could be made rather than the current cash offer.
“The proposal also refers to an alternative to certificates being developed that would offer all shareholders the option of electing to receive a combination of cash and unlisted securities at a lower initial price than the cash proposal” , the company said in a statement.
Bingo has signaled that it will only enter transactions if there is “appropriate value” for all shareholders.
The terms of the deal would likely require the acceptance of either offer by the company’s chief executive, Daniel Tartak, and its director, Ian Malouf, who are both major shareholders.
“The proposal is being reviewed by an independent committee of Bingo’s Board of Directors and discussions and due diligence with the Consortium are ongoing,” the statement said. “There can be no assurance that a transaction will result from discussions with the consortium.”