Terra Firma, SUEZ may start Biffa bidding war

Montagu and Global Infrastructure Partners have agreed their Biffa bid, but the waste disposal company board’s statement that rival bidders are in due diligence caused the company’s share price to rise five percent above the offer price.

UK buyout firm Montagu Private Equity and European infrastructure specialist Global Infrastructure Partners have agreed their £1.23 billion ($2.39 billion; €1.65 billion) bid for Biffa, according to a statement issued by the waste disposal company.

Biffa said it was also in talks with undisclosed rival bids. According to UK newspaper Daily Telegraph trade buyer SUEZ and UK buyout firm Terra Firma are each in separate talks to buy the company. The Telegraph said both these bids must be tabled within ten days.

The company’s share price rose 12 percent to £3.67 per share at 1443 GMT, substantially above the offer price of £3.50 per share.

The statement said the third parties have been given the same access to due diligence as Montagu and Global Infrastructure Partners. The board has not yet received a firm proposal from the rival bidders and so it has recommended the Montagu and Global Infrastructure Partners bid.

Global Infrastructure Partners took the place of Hg Capital who decided not to bid for Biffa as partner of Montagu last month, according to a source close to the deal.

The agreed bidders will receive a 1 percent break fee of £12.3 million, if the offer falls through.

Global Infrastructure Partners is a specialist infrastructure firm with cornerstone investments from US bank Credit Suisse and US conglomerate General Electric.

It bought London City Airport for €750 million ($1.1 billion) in a joint venture with US insurer AIG in 2006.

Law firm Linklaters is advising Montagu and Global Infrastructure Partners.