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UPDATE: Renewi says Macquarie takeover offer undervalues company

28th Sep 2023 14:30

(Alliance News) - Macquarie Asset Management on Thursday said it is considering making a takeover offer for Renewi PLC worth GBP636 million, but Renewi rejected the suggested price as too low.

Milton Keynes-based Renewi turns waste into recycled products. Macquarie Asset Management is part of Sydney-based financial services firm Macquarie Group Ltd.

Macquarie said the offer would be by one or more of its managed funds. It said that on Monday it had proposed to the Renewi board an offer of 775 pence per share in cash. This was rejected, Macquarie said.

Renewi shares were up 37% at 695.00 pence in London on Thursday. Macquarie shares closed down 0.8% at AUD165.02 in Sydney.

Renewi later Thursday confirmed it had rejected the offer, calling it "an unsolicited and highly conditional non-binding proposal". Renewi said its board considered the proposal "in detail" and believes it "fundamentally undervalues the value of Renewi and its prospects".

Renew asked its shareholders to take no action.

Macquarie, in its earlier statement, asked the Renewi board to "engage constructively" to agree an offer to put forward to Renewi shareholders.

Macquarie argued: "The proposal provides a compelling opportunity for Renewi's shareholders to realise their investment for cash at a very significant premium and at an attractive multiple. 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."

Back in July, Renewi said first-quarter revenue and earnings before interest and tax were lower than the year prior, as expected, due to lower recyclate prices. However, the company said at the time that it expects full-year results to be in line with market expectations, and the board remains "confident" of its growth opportunities in the medium term.

By Tom Waite, Alliance News editor

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