Macquarie girds for $1.2b takeover battle with European waste company

afr.com:

London | Macquarie has taken the unusual step of making a public and hostile takeover bid for a listed company, the European waste management group Renewi, only to be firmly rebuffed.

Macquarie Asset Management – whose major deals and investments are most often private with little detail made public – announced the £636 million ($1.2 billion) potential offer late last week. Renewi’s rejection of the “unsolicited” bid, however, was immediate.

Most of Macquarie’s deals and investments are hammered out behind closed doors. Bloomberg

“The board considered the proposal in detail and believes it fundamentally undervalues the value of Renewi and its prospects, and following due consideration it was rejected this morning,” Renewi said in a statement to the London Stock Exchange, where the company is listed.

The potential offer of £7.75 a share represented a premium of more than 50 per cent to the pre-bid share price, according to Macquarie.

“Macquarie believes that Renewi’s ability to deliver its stated ambition will remain constrained under the current capital structure by the limited near-term operating cash flow and limited leverage capacity,” the asset manager said in its statement after Renewi went public with its rejection.

“In a challenging macro and cost-of-capital environment, Macquarie believes the proposal represents an attractive alternative for shareholders, attributing a full and fair valuation for the company’s future potential.”

Under British takeover law, Macquarie has until October 26 to turn its proposed offer into a firm bid, unless Renewi extends the time period.

It is likely that the two sides will now be negotiating behind closed doors, although this Wednesday Renewi will hold a long-scheduled but now