£315m takeover bid agreed for waste management group

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Morgan Stanley Infrastructure (MSI) has agreed a £315m takeover bid for waste management business Augean.

The deal comes more than two months after MSI revealed it was considering an approach for the Wetherby-based company.

MSI has tabled a 280p-per-share bid, with an additional 20p-per-share contingent on the outcome of Augean’s outstanding landfill tax claims.

Augean has been involved in a long-running dispute with HMRC over how much landfill tax it should have paid.

MSI’s offer values the Augean between £293.9m and £314.9m.

Jim Meredith, executive chairman of Augean, said: “The board of Augean believes MSIP is well-respected as a long-term investor in the infrastructure sector and will be able to support Augean’s strategy of providing the highest level of customer service and safe operations in niche and highly regulated hazardous waste markets.

“This should allow the business to develop its services to an increasing breadth of customers while offering commensurate opportunities for our employees.”

Augean has enjoyed a sustained revival in recent years, with MSI’s bid at ten times the level seen at the start of 2018. Augean’s shares were trading just below 250p when MSI revealed its interest in May.

Meredith added: “We are very proud of Augean’s performance in successfully executing a complex turnaround programme and delivering very strong share price performance in recent years.”

MSI is part of Morgan Stanley’s global private infrastructure investment platform, Morgan Stanley Infrastructure Partners (MSIP).

MSIP invests in and manages a diverse portfolio of infrastructure assets, focused on power generation and utilities, natural gas, transport, and digital infrastructure. Its UK investments have included Affinity Water and rolling stock company Eversholt Rail Group.

In a statement to the stock market, it said: “MSIP is interested in the opportunity to gain exposure to the UK hazardous waste market and views Augean as an attractive company operating in this sector, focusing on the energy from waste, construction, industrial and nuclear end markets.

“MSIP believes Augean is a high quality business with a network of strategically located facilities, a well-known and respected brand, and a customer base operating on long-term contracts.”