UPDATE 3-Australia Bingo Industries Receives $ 1.8 Billion Takeover Offer, Shares Soar

* A consortium led by CPE Capital presents an offer of A $ 3.50 / share

* Co says talks with PE consortium are underway

* Shares hit their highest level since February 2020 (Updates in last paragraph with CPE Capital declining to comment)

Jan. 19 (Reuters) – Australia’s Bingo Industries said on Tuesday it had received a A $ 2.29 billion ($ 1.8 billion) cash takeover offer from a consortium led by the private equity firm CPE Capital, raising the shares of the waste management company to an 11-month high.

The offer comes at a time when the government is injecting stimulus into the recycling and construction sectors and pushing infrastructure investment as the economy reopens after lockdowns imposed by coronaviruses.

Under the proposal, Bingo shareholders would get AU $ 3.50 per share, a premium of nearly 28% from the share’s last close, the company said in a statement.

A deal would hand nearly A $ 460 million to CEO and largest shareholder Daniel Tartak, whose parents started Bingo in the outer Sydney suburbs in 2005 by acquiring a small dumpster business for less than A $ 1 million.

Bingo said the proposal included an alternative structure that would give shareholders the option of receiving a mix of cash and unlisted scripts at a lower initial price than the cash offering.

“The proposal is being reviewed by an independent committee of Bingo’s board of directors and discussions and due diligence with the consortium are underway,” the company said.

Bingo shares jumped 23.7% to AU $ 3.39, their highest since February 20, 2020, but still trading below the offer price.

“(The offer) is just a shot and a chance to engage with the family,” said Henry Jennings, senior analyst at Marcustoday Financial Newsletter.

“The takeover will have to be closer to A $ 4 for it to cross the line.”

CPE Capital’s investment portfolio ranges from food to the automotive sector, including the Banksmeadow Recycling site, which it bought from Bingo in 2019.

CPE Capital declined to comment.

$ 1 = AU $ 1.3017. Reporting by Sameer Manekar in Bengaluru, additional reporting by Byron Kaye in Sydney; Editing by Nick Zieminski and Stephen Coates