Waste management company Bingo Industries has announced it is considering a $2.3bn takeover bid offered up by an Australian private equity group.
In an update to the Australian Stock Exchange on Tuesday, Bingo confirmed media reports it had been approached by CPE Capital and a consortium of investors to acquire the company under a proposal of $3.50 per share.
The consortium includes Macquarie Group’s infrastructure arm Macquarie Infrastructure and Real Assets.
CPE’s offer at $3.50 per share is a premium to Bingo’s Monday trading price that closed at $2.74 a share. Its current market capitalisation is approximately $1.8bn.
Bingo runs waste management disposal centres and more than 300 orange-branded trucks in Melbourne and Sydney.
Bingo shareholders have suffered large swings in the value of their stock since the company listed on the ASX in May 2017.
In February 2019, the share price plummeted to $1.17 each after Bingo cut profit forecasts by nearly 20 per cent.
When financial markets tanked in March last year following the onset of the coronavirus pandemic, Bingo’s stock value fell to lows of $1.82 per share.
The company also noted an alternative scrip offer could be made rather than the current cash proposal.
“The proposal also references a scrip alternative that is under development that would provide all shareholders with the option of electing to receive a mix of cash and unlisted scrip consideration at a lower upfront price than the cash proposal,” the company said in a statement.
Bingo flagged it would only enter into the transactions if there was “appropriate value” for all shareholders.
The conditions of the agreement would likely require the acceptance of either offer by the company’s chief executive Daniel Tartak and its director Ian Malouf, who are both major shareholders.
“The proposal is being considered by an independent board committee of Bingo and discussions and due diligence with the consortium have been ongoing,” the statement said. “There can be no assurance that any transaction will result from discussions with the consortium.”