Amid reports that US buyout group KKR put in a bid to buy Viridor, parent company Pennon saw a 9% increase in shares on Monday (13 Jan).
According to reports by the Sunday Telegraph, US private equity group KKR has attempted to put in an early bid to buy water and waste management firm, Viridor.
Pennon shares were up 8.595% at 1,093 pence in early Monday (13 Jan) morning London trading, making the stock the second-best performer in the FTSE 250, according to Market Watch.
In September, Pennon announced a strategic review of Viridor, which reportedly could lead to a sale or demerger of the business.
The review is ongoing and all options are being considered. We will update the market as and when it is appropriate to do so
Investment bankers from Morgan Stanley and Barclays are understood to have been appointed to sell Viridor, which has been valued at between £3 billion and £3.8 billion.
Although Pennon declined to comment on KKR’s approach and the potential sale, it did say: “The review is ongoing and all options are being considered. We will update the market as and when it is appropriate to do so.”
According to Market Watch, private equity groups find the waste and recycling industry attractive because “it generates a steady stream of revenues and is typically protected from any downturns in the wider economy. Contracts are often long term, providing buyout groups with insight into future cash flows”.
Viridor last year overtook SUEZ to become the third-largest waste operator in the UK, with an impressive 8.1% revenue jump, according to market analysts Headpoint in a Circularreview of M&A activity in the waste sector.
