The appetite of private equity firms for buyouts seems to be growing, and waste group Shanks could be one of the first targets on the menu. US buyout group Carlyle has made a preliminary approach at 135p, which represents a near 50 per cent premium to the share price before the offer was announced.
Shanks' management has rejected the offer as too low, but also made the rather unusual decision to name a price that they would deem as acceptable. The board is after 150p cash for shareholders.
While the no-nonsense upfront approach to the bid has received some criticism, shareholders seem to like it. Shanks' two largest shareholders, Schroders and Legal & General, with a combined holding of 32 per cent, have pledged their support for the tactic. It is thought the move could prove a smart way to extract a good price, while keeping the bidding process to a minimum.
