And, the waste management company’s board has said that should a firm offer be placed at the current proposal of 445 pence per share, “it is minded to recommend it to Biffa shareholders”. Reuters has said this values Biffa at $1.78 billion (£1.42 billion).
In a statement, Biffa explained that the proposals have been carefully evaluated, and the company has considered “the various risks” currently faced by Biffa.
This includes the current status of discussions between HMRC and Biffa over a landfill tax enquiry, which Biffa said could cost it as much as £153 million.
The Biffa statement read: “The board of Biffa has concluded that should a firm offer be made on the same financial terms as the proposal it would be minded to recommend it to Biffa shareholders, subject to the agreement of other customary terms and conditions. Accordingly, on the basis of the proposal, the Board has granted ECP access to due diligence materials.”
Should a firm offer be made on the same financial terms as the proposal….We would be minded to recommend
– Biffa board
Landfill tax
While Biffa said it continues to trade well, with underlying performance being in line with the board’s expectations, it raised concern over a possible landfill tax bill from HMRC.
It explained that as part of concerns HMRC has regarding potential misclassification of waste across the industry, Biffa is currently the subject of an enquiry by HMRC regarding certain aspects of its landfill tax compliance.
Biffa “strongly refutes HMRC’s concerns” and says it is cooperating, but “based on evidence received to date”, the potential liability could range from approximately £170,000 up to a possible maximum of approximately £153 million.
Energy Capital
The US private equity firm has experience in the UK waste market, having previously owned Wheelabrator Technologies before it was sold to Macquarie Infrastructure Partners in 2018.
Biffa currently has two energy from waste projects in its portfolio, at Protos and Newhurst.
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