Biffa's $2.4 Billion Buyout

Biffa PLC said Montagu Private Equity continues to be interested in pursuing a cash offer for the company and has agreed to work with Global Infrastructure Partners (GIP) towards making an offer for its entire issued share capital at 350 pence a share.

The waste management company said it has received notification that Hg Pooled Management no longer wishes to pursue an offer, following its revised 350 pence a share proposal in partnership with Montagu last December.

The announcement comes after media reports last weekend that GE-backed GIP had made an approach worth 1.5 bln stg for the British waste collection group.

Biffa also reiterated it would be prepared to recommend an offer at 350 pence per share, as on Dec 7 when it decided to open the books after rebuffing an earlier 330 pence a share proposal.

At this level, the offer values the company at 1.23 bln stg and reaches the 1.5 bln stg mark when accounting for net debt. Barclays (nyse: BCSnews people ) estimates Biffa will have about 333 mln stg in net debt at the end of this full year.

A spokesman for Biffa would not disclose any dates but confirmed the mooted offer is around the 1.5 bln stg figure and added there can be no certainty that an offer will be made.

Biffa, which spun off from Severn Trent PLC in late 2006, is one of the top three operators of landfill services in the UK with over 32 landfill sites managing about 7 mln tonnes of trash a year. As one of the last remaining independent waste companies in the country, it had been seen as a prime takeover target for some time.

Barclays noted that, with GIP not considering a counter-bid on its own as hinted in the weekend press, there is now less of a chance that a bid will reach higher than 3.50 stg a share.

'The share price is trading close to the offer value and risk-averse investors may wish to exit the stock rather than wait for a bid to go through,' the broker said in a note this morning.

At 11.40 am, shares were down 13 pence at 312 pence, or 4 pct lower.