Bingo Industries appears to be moving increasingly down the privatisation route, with reports that its suitors, CPE Capital and Macquarie Infrastructure and Real Assets, have now completed their due diligence.
The understanding now is all that needs to unfold for a sale are the commercial negotiations between the consortium and the company. Discussions will centre not only on price but on the structure of the transaction.
CPE and MIRA had earlier put forward an indicative offer of $3.50 per share for the Australian listed waste disposal company, valuing it at about $2.3bn, and Bingo granted the parties access to due diligence material.
Some expect that it could be only days before a formal deal is announced, although others say that it could still be up to a few weeks. The widely held view around the market has been that the pair will emerge shortly with a slightly higher formal offer – somewhere between $3.50 and $4, including franking credits.
Expectations are that Bingo’s major shareholders, Ian Malouf and chief executive Daniel Tartak, will retain some ownership, with shareholders also offered the opportunity to take scrip in the company.
CPE and MIRA are considered the frontrunners to buy the business, although there are suggestions that another suitor, such as Keppel Infrastructure, could be waiting in the wings in case negotiations were to stall.
The $3.50 offer is a 28 per cent premium to the closing price before news of the offer was made known in the market.
Bingo, advised by UBS, is heavily weighted towards the construction industry, making money from waste recycling and waste disposal contracts on construction and infrastructure jobs, with its large skip bins used for building projects.
The company was listed by the family of chief executive Daniel Tartak in 2017 with its value at about $628m. He holds a 19.8 per cent stake.
After Bingo bought Dial a Dump in 2019 for $577m, Dial a Dump owner Ian Malouf became a shareholder. He currently owns about 12 per cent.
This week, Bingo handed down a $15.85m profit for the six months to December, down 58.5 per cent on the previous corresponding period as it felt the economic impact from the global pandemic.
Mr Tartak said the company was well positioned to benefit from government stimulus measures.
Bingo’s shares closed on Wednesday at $3.14.
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