Oct 14 UK waste management group Biffa has
restructured and relaunched its London Stock Exchange IPO with a
fixed price of 180p and primary target proceeds of £212m versus
an original range of 220p-270p and proceeds of £275m-£285m.
Bookbuilding will run for just one day. The revived deal,
which closed with insufficient demand on Wednesday, was covered
on indications at launch this morning and formally covered with
confirmed orders by 10am.
The book will close end of day today and trading begins on
Secondary selling from Bain Capital, Angelo Gordon and
Avenue Capital Group was under consideration in the original
structured but has now been ditched. In a significant u-turn,
the shareholders will now invest around £49m alongside
management into Biffa through a concurrent share issue of 27.4m
new shares at the same 180p per share as the IPO.
As a result of the repricing, Biffa's market capitalisation
will be £450m, compared to an original target of £550m-£675m.
A secondary greenshoe will bump the free-float to 50% from
47% on the base deal, close to where it had been expected in the
A banker involved said that the IPO price represents
estimated 2017 EV/Ebitda of 5.6, dividend yield of 3.1% and a
P/E of 10.2.
Waste management peers such as Veolia Environnement and Suez
are trading around 6.5 and 6.8 respectively on EV/Ebitda, while
other services comps such as G4S and Rentokil were trading
around 9 and Bunzl at around 15.
Citigroup and JP Morgan are joint global coordinators, and
joint bookrunners with HSBC. Peel Hunt is lead manager.
Rothschild is advising.
(Reporting by Robert Venes)