“The board remains confident in the company’s future prospects as a pure play market leader in Europe’s most advanced recycling markets, and remains committed to delivering on its strategy to realise attractive profitable growth,” Renewi said in a statement to the LSE.
“The board conveyed to Macquarie that formal engagement was possible, subject to price. However, the price level of the revised proposal did not provide a basis to provide Macquarie with access to due diligence.”
Macquarie’s initial offer represented a 50 per cent premium to the pre-bid share price, but Renewi said it had consulted shareholders before rejecting the proposal.
The asset manager’s pitch to shareholders was that Renewi had insufficient operating cash flow and debt-raising capability to “deliver its stated ambition”. Macquarie also reminded shareholders the company had not paid a dividend for several years, although Renewi subsequently pledged to reinstate one.
Renewi describes itself as a “waste-to-product company”, specialising in garbage recycling and water treatment. It works mostly in the Netherlands, Belgium and Britain. It was formed six years ago when Britain’s Shanks Group merged with Van Gansewinkel Groep.
Macquarie’s attempt to take private of a listed European company marked a departure from the way it usually operates off-market deals. The approach could reflect just how squeezed Europe’s pipeline of attractive infrastructure deals and assets has become this year, as borrowing costs rise and the regional economy slows.
Macquarie has spent more than a decade building its presence in the waste management sector, spending more than $US5 billion ($7.7 billion) in the US, and in Asian countries including China and South Korea.
In June, Macquarie snared a majority stake in the $U900 million Florida-based company Coastal Waste & Recycling, on undisclosed terms. In Australia, Macquarie spent $2.3 billion in 2021 buying Australian waste company Bingo Industries, taking it off the ASX.
Its only waste management business in Europe is Beauparc, acquired in mid-2021 from the company’s founder and the Blackstone Tactical Opportunities Fund. Beauparc’s base is in Ireland. Like Renewi, it also has operations in Britain and the Netherlands, offering potential synergies with the new target.
A year ago, Macquarie thought it had completed a £2 billion deal to buy British waste management business Suez Recycling & Recovery from French waste giant Veolia, only to see a rival consortium exercise its right of first refusal.
