Private equity in £1.4billion bid for Biffa

BIFFA shares soared as it became the latest target of american private equity.

The waste giant has been swooped on by new Jerseybased Energy Capital Partners (ECP) with a near-£1.4bn bid.

Shares in the rubbish collector jumped 27.2pc, or 88.4p, to 413.4p. ECP made a series of unsolicited offers for the business before settling on a potential 445p per share deal, which would value it at £1.36bn.

Biffa’s board said if an offer was made on those terms it ‘would be minded’ to recommend it to shareholders.

But the deal was cast into doubt as Biffa admitted it is under investigation by HMRC into whether it has been correctly paying landfill taxes.

It insisted the concerns are unfounded but said it could be on the hook for between £170,000 and £153m in back payments, fines and interest.

And Biffa’s shares stayed around 8pc lower than ECP’s potential offer price, suggesting investors were uncertain an agreement will be made.

AJ Bell investment director Russ Mould said: ‘it’s easy to see why private equity would want to own Biffa. its services are in demand whatever the economic climate and a lot of inflationary pressures can be passed on to customers.

‘Strategically it has made good progress with investments in plastics recycling and energy from waste services. Steady money coming in, an opportunity to increase scale and an undemanding equity valuation are all key attractions.’ it would make Biffa the latest business swooped on by private equity predators. the buyout firms were accused of ‘pandemic plundering’ after takeovers including of asda, Morrisons and G4S.

Aberdeen-based bus and train operator FirstGroup was last month swooped on by US-based i Squared Capital.