5th Dec 2007 14:15
Biffa Plc05 December 2007 Biffa Plc ("Biffa") - Rejection of renewed proposal On 27 November 2007, the board of directors of Biffa Plc (the "Board") receiveda proposal from Hg Pooled Management Limited and Montagu Private Equity LLP (the"Potential Offerors"), indicating that they were considering making a cash offerfor the issued share capital of Biffa at a price of 330 pence per share. Thisproposal is at the same level as the proposal made to the Board on 4 September2007, and which was rejected shortly thereafter. The Board, which has been advised by Citi and JPMorgan Cazenove, met earliertoday to consider this proposal. As with the earlier proposal the Board gave itdetailed and careful consideration and unanimously decided to reject it on thebasis that it materially undervalues the business and prospects of Biffa. The Board considers that the proposal fails to take into account key drivers ofvalue which include: • Biffa is a leading waste management business in the UK - A leader in Industrial & Commercial collection with over 450 national customers and around 75,000 local customers - One of the largest Landfill and Resource Recovery operators with 33 landfill sites and 42 treatment and recycling centres across the UK - Proven experience in developing alternative treatment and disposal technologies including energy from waste and mechanical and biological treatment - An established presence in the PFI market and a disciplined approach to the appraisal of potential opportunities • Biffa is delivering a strong performance as seen in its recent interim results - Revenues up 4.9% to £395 million - Operating profits up 7.2% to £52.4 million - Adjusted earnings per share up 10.8% to 8.2 pence - Free cash flow at £32.2 million, an increase of 18.4% • Biffa is well-positioned for future development - Biffa has identified significant opportunities for investment over the next five years driven by changes in the regulatory and fiscal framework - Biffa is well-placed to exploit opportunities in the sector given its access to waste flows and recyclable materials through its collection activities and its experience in many of the emergent technologies for treatment - Biffa is already actively pursuing a number of opportunities in this market place • expansion of its recycling services to provide extensive coverage for paper, card and glass • plans to broaden its network of Material Recovery Facilities • development of alternative sources of fuel for generation such as digesters and refuse-derived fuels • 6 PFI opportunities Accordingly, the Board has decided to reject this approach and urgesshareholders to take no action in respect of their shares. Bob Davies, Chairman of Biffa, said: "The UK waste management market is undergoing significant change driven bygrowing environmental concerns and increased legislation. Biffa has excellentmarket positions across the breadth of the waste management value chain. As aleading integrated player, Biffa is ideally positioned to capitalise on theopportunities arising out of the transition of the UK waste market from wastedisposal to resources management. The interim results we reported last week demonstrate the strong financial andoperational progress Biffa is making with good growth in revenues, profit andcash flow. The Board is clear that the proposal of 330 pence per sharematerially undervalues the business and prospects of Biffa." As required by the Takeover Code, Biffa confirms that this announcement is notbeing made with the agreement or approval of the Potential Offerors. For theavoidance of doubt, there can be no certainty that the approach by the PotentialOfferors will lead to an offer being made for Biffa or as to the terms on whichany offer will be made. Enquiries: TulchanDavid Trenchard 020 7353 4200David AllchurchStephen Malthouse Citigroup Global Markets Limited ("Citi") which is authorised and regulated inthe United Kingdom by the Financial Services Authority, is acting for Biffa andno one else in connection with this announcement and will not be responsible toanyone other than Biffa for providing the protections afforded to clients ofCiti or for providing advice in relation to the contents of this announcement,or for any other transaction, arrangement or matters referred to in thisannouncement. JPMorgan Cazenove Limited ("JPMorgan Cazenove"), which is authorised andregulated in the United Kingdom by the Financial Services Authority, is actingfor Biffa and no-one else in connection with this announcement and will not beresponsible to anyone other than Biffa for providing the protections afforded toits clients or for providing advice in relation to the contents of thisannouncement, or for any other transaction, arrangement or matters referred toin this announcement. Dealing disclosure requirements Under the provisions of Rule 8.3 of the Takeover Code, if any person is, orbecomes, "interested" (directly or indirectly) in 1% or more of any class of"relevant securities" of Biffa, all "dealings" in any "relevant securities" ofBiffa (including by means of an option in respect of, or a derivative referencedto, any such "relevant securities") must be publicly disclosed by no later than3.30 pm (London time) on the London business day following the date of therelevant transaction. This requirement will continue until the date on whichany offer becomes, or is declared, unconditional as to acceptances, lapses or isotherwise withdrawn or on which the "offer period" otherwise ends. If two ormore persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an "interest" in "relevant securities" of Biffa,they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in"relevant securities" of Biffa by any potential offeror or Biffa, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Takeover Code, which can also befound on the Takeover Panel's website. If you are in any doubt as to whether ornot you are required to disclose a "dealing" under Rule 8, you should consultthe Takeover Panel. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BIFF.L