UK waste management company Biffa said it had received a £1.36bn takeover bid from private equity firm Energy Capital Partners, sending the group’s shares surging by almost a third.
The proposal from Energy Capital is pitched at 445p a share, Biffa said on Tuesday, a premium of 27 per cent to the company’s closing share price on Monday.
Biffa said it would be “minded to recommend” the proposal to shareholders if Energy Capital were to make a firm offer at that price.
The board’s willingness to back an offer at that price reflects both the potential of Biffa’s current strategy and the risks over a probe UK tax authorities are conducting into landfill, Biffa said in a statement.
HM Revenue & Customs is investigating Biffa over its tax compliance with landfill, a probe that the company said could result in a liability ranging from £170,000 up to £153mn.
Biffa added that it “strongly refutes” HMRC’s concerns and that it has not received a formal claim for tax.
Shares in Biffa surged 29 per cent in morning trading to 419p.
Biffa said it had granted Energy Capital access to materials to conduct due diligence on the company.