Cleanaway a possible target for Macquarie Asset Management

Cleanaway is set to be closely watched when it delivers its full-year earnings result on August 19.

Cleanaway is understood to be back on the radar as a potential takeover target, and the question is whether Macquarie Asset Management has the Australian listed waste management business as the next item on its shopping list.

While some believe that the Australian Competition & Consumer Commission would block a deal for Macquarie to buy Cleanaway, others think it’s possible and that it will be the next target for Macquarie.

Cleanaway is set to be closely watched when it delivers its full-year earnings result on August 19.

Macquarie Asset Management purchased Cleanaway’s rival Bingo Industries in 2021 for $2.3bn.

Now there are reports overseas that it is in advanced talks to buy the UK-based Suez waste management operations for $US2.5bn following Veolia’s merger with Suez last year.

The new Suez is owned by Meridiam, GIP, CDC and CNP Assurances.

Infrastructure buyers that are prepared to acquire non-infrastructure assets that have infrastructure-like qualities – known as ‘‘core plus’’ – have cast their eye over Cleanaway before.

However, whether it remains a takeover target in the months ahead will depend on its performance under chief executive Mark Schubert, who was appointed a year ago.

Shares in the company were tracking lower between April and July before staging a slight comeback, with the company now worth $5.5bn.

It would be interesting to know whether Igneo Infrastructure Partners has an open file on the business.

Igneo bought Waste Management New Zealand this year for $NZ1.9bn.

Should it also buy Cleanaway, it would be putting the old business back together.

Cleanaway, which was previously called Transpacific, used to own Waste Management New Zealand before it offloaded the company to Beijing Capital for $910m in 2014.

The underbidders for Igneo were Kohlberg Kravis Roberts and Morgan Stanley Infrastructure, so they too could be Cleanaway suitors.

Another company in the industrial sector that will be closely watched by suitors during reporting season is Ansell, which delivers its results on August 23.

Analysts at Credit Suisse will be looking out for organic growth, market share gains and greater clarity around its inventory positions, which may indicate signs of earnings pressure.

Credit Suisse is forecasting weaker earnings with the rising cost of raw materials, negative foreign exchange movements, supply chain hiccups, and weaker demand for rubber gloves in the aftermath of the pandemic, with a slowing economy.