Biffa, a UK waste management group, has said it is prepared to accept a buyout offer from a pair of buyout firms after receiving a revised offer.
The company had previously rejected two offers from HgCapital and Montagu before agreeing to a bid of £3.50 (€4.87; $7.01) a share.
In a statement to the London Stock Exchange, Biffa said that it had received the improved proposal on 7 December, which would also see shareholders retain an interim dividend of 2.3p declared in November. Biffa has opened its books to HgCapital and Montagu.
“On the basis of this proposal, the board has agreed to grant the potential offerors access to company information to allow them to complete their confirmatory due diligence,” the company said.
“The board has confirmed that it would be prepared to recommend an offer at this level if such an offer were to be made.”
A 350p offer, subject to due diligence, would value the company's shares at about £1.23 billion, a premium of 42.9 per cent to Biffa's average closing share price over the three months before the first offer for the company was announced.
The parties have entered into a break-fee agreement which means Biffa will have to pay the private equity firms £2 million, if it walks away. HgCapital and Montagu, which owns a 2.4 per cent stake in Biffa, first approached the company on September 7 with a bid of 330p a share.
The mid-market buyout firms repeated the bid again on 5 December, without sweetening their offer because Biffa's share price had fallen. Twice Biffa, which spun out last year from the water company Severn Trent, turned down the approaches, saying the bids undervalued the company.
Montagu sold this year its investment in Cory Environmental, a waste management business, to a group of infrastructure investors.