Waste manager Renewi accepts £700m offer from Macquarie in latest UK takeover

Australian investment giant Macquarie has struck a deal to acquire British-listed waste management company Renewi for £700 million.

The Sydney-based asset manager – often dubbed the ‘Vampire Kangaroo’ by critics – has reached a preliminary agreement valuing Renewi at 870 pence per share.

This represents a 57 percent premium to the company’s share price on Wednesday and a 41 percent premium to Renewi’s average share price over the previous three months.

In a joint statement, the two groups said the proposal was final and would not be increased unless a third party announced a potential offer or had a “firm intention” to make a better offer for Renewi.

Macquarie attempted a £636 million takeover of the FTSE 250 business last year before walking away after Renewi turned it down.

The former owner of Thames Water has received support for his latest bid from Coast Capital, Paradice Investment and Avenue Europe International, which together own 19 percent of Renewi’s shares.

If the acquisition is completed, Macquarie plans to provide capital to advance Renewi’s strategy, support the group’s current transformation programs and ‘fully secure’ the employment rights of its employees.

Bosses at Renewi said they were optimistic about their “prospects as a pure market leader in Europe’s most advanced recycling markets”.

They added: ‘The board is also confident in Renewi’s strategy and execution plan to deliver a step change in margins and cash flow.’

After announcing the deal, Renewi shares rose 44.8 percent to 802p, making them the biggest gainer on the FTSE All-Share Index.

Renewi traces its roots back to a construction company founded in 1880 by Guy Shanks and Andrew McEwan that helped build Scotland’s railway system.

Since the late 1980s, the Milton Keynes-based company has listed on the London Stock Exchange, expanded into Europe and sold its landfill and gas-fired power plants.

It also changed its name from Shanks Group to Renewi in 2017, after the former merged with Dutch recycling company Van Gansewinkel.

The company now operates in four countries: Belgium, France, the Netherlands and Portugal, after selling its UK municipal division to Biffa for £131m last month.

When Renewi CEO Otto de Bont agreed the sale in May, he described it as a “transformational milestone” that would increase cash flow and profit margins and allow the company to focus on expanding into European recycling markets.

Renewi’s planned sale to Macquarie comes amid a wave of foreign companies buying up London-listed companies, which are often considered undervalued in contrast to their international peers.

In recent months, cybersecurity specialist Darktrace, video game services company Keywords Studios and music rights investor Hipgnosis Songs Fund have all succumbed to overseas ownership.

Investment platform Hargreaves Lansdown, Robinsons Squash producer Britvic and Royal Mail owner International Distribution Services have also signed takeover deals worth billions of pounds.