Recycling giant Bingo defends its environmental record ahead of possible takeover

Recycling giant Bingo Industries has defended its environmental credentials ahead of a possible takeover by a consortium of investors after a mysterious short seller questioned its recycling record.

The ASX-listed company received an offer from private equity firm CPE Capital and Macquarie Infrastructure and Real Assets (MIRA) in late January, valuing the company at $2.6 billion.

Following the offering, Bingo was hit with a short seller report from a company called SnowCap in February that questioned whether Bingo was recycling the amount of waste it claimed and raised concerns about its valuation.

A Bingo spokesperson said the company had a strong environmental record and highlighted its sustainability report which highlighted the importance of environmental, social and governance (ESG) principles for its key stakeholders.

Bingo Industries is undergoing a private equity buyout that has increased scrutiny of its environmental records.

“The SnowCap report is full of factual errors and reached a series of conclusions based on historical information and assumptions of incomplete or inaccurate data,” he said. “We issued no formal response to the report because it lacked credibility and our investors were aware of it.”

The release of SnowCap’s report on Bingo had little impact on the company’s share price, but a SnowCap spokesperson said the market failed to respond to concerns raised in the report about Bingo ESG credentials.

The short seller released a report on Freedom Foods last year, but is otherwise little known and has raised eyebrows for the unusual decision to release a report on an M&A target.

The SnowCap spokesperson said environmental concerns should be at the forefront of CPE and MIRA, which have both advocated applying ESG principles to investments.

In its report, SnowCap alleged that the 83% recovery rates claimed by the waste management company were grossly overestimated and that Bingo’s own sustainability documents indicated that it actually treated less than half of the waste estimated by SnowCap he was receiving.