Talks were called off after the Carlyle Group offered a final price indication of 120 pence cash per share - a drop from the initial offer of 135 pence per share.
Since Carlyle approached Shanks in October 2009, the two firms have been in discussions. When MRW reported on the approach in December, Shanks had wanted 150 pence per share ‘to deliver an appropriate value to shareholders’. (See MRW story)
A statement from Shanks said: “The board of Shanks has subsequently met and concluded that it is unwilling to recommend an offer at such a level and accordingly that further discussions with Carlyle are not in the interests of Shanks shareholders.”
Shanks chairman Adrian Auer said: “The Board’s response to the approach from Carlyle has always been about price. Although the timing of their approach was not of our choosing, we have engaged fully and professionally, but Carlyle has failed to offer a price which (in the view of the board) properly reflects the value of the group. Shanks is a well-managed group with good strategic positioning in the evolving European waste markets and the board is confident that the group can deliver attractive growth in shareholder value over the medium term.”
According to reports, Shanks’ shares fell 20% when the news that the discussions had ended was announced.