Shares in hazardous waste firm Augean have rocketed as it emerged a rival bidder is trying to acquire the company.
The Wetherby-based firm has four sites in Aberdeen as well as facilities in Peterhead and Lerwick.
It is also based at the Port of Dundee where it worked on the prominent Shell Curlew decommissioning project for more than a year.
In May, banking giant Morgan Stanley made an offer worth around £300 million for Augean. Two extensions have been granted to try to complete the deal.
A new offer has been made by investment firms Ancala and Fiera Infrastructure of Canada under the banner of Eleia.
Their bid of £3.25 a share values the firm at £341.2m.
Augean’s board has agreed terms and is now recommending this higher offer for approval.
A statement announcing the pact said the “Bidco” (Eleia) had received binding irrevocable undertakings and non-binding letters of intent in respect of 57,615,502 Augean shares, representing approximately 54.89% of Augean’s issued ordinary share capital, as of yesterday (August 24)
Augean’s share price rose 17% this morning (August 25), from £2.85 to £3.34 – beyond the new offer price. The stock was worth £3.33 at market close.
This suggests shareholders now anticipate an improved offer from Morgan Stanley Infrastructure (MSIP).
Augean offer is ‘good outcome’
Jim Meredith, executive chairman of Augean, described Ancala and Fiera Instructure as “well-respected as long-term investors in the infrastructure sector”.
He said the firms would keep Augean’s existing footprint.
In a message to investors, he added: “They 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.
“We recognise the increase in the price offered to Augean shareholders… when compared with the MSIP offer and have accordingly recommended the offer to Augean shareholders.”
Mr Meredith said the acquisition was a “good outcome for all Augean stakeholders, including our employees, our customers and the wider UK economy.”
Growth ambitions
Meanwhile, Ancala and Fiera Infrastructure both emphasised their ambitions to grow Augean.
Ancala partner Karen Dolenec said: “Augean provides essential and responsible hazardous waste management services to key private and governmental infrastructure operators.
“Ancala has been impressed by the high quality of the team and operations and is excited to support the company in expanding its role in this critical part of an effective waste management ecosystem.”
What comes next?
Shareholders are due to receive further details of the offer in the week of September 6.
This communication will also contain the proxy forms of whether to accept the bid or not.
A general meeting will then be held in the week of September 27.
Then, if the deal wins approval, the transaction will complete in October.
Aberdeen-based group subsidiary Augean North Sea Services was launched by Augean and oil and gas service firm Scomi Oiltools in 2012. It was specifically created to serve the North Sea oil and gas industry.
Augean invested £3.05million in its initial 70% stake and later acquired Scomi’s share.