EQT's Offer for Cleanaway Looks Opportunistic, but Understandable

Dow Jones08-14

2328 GMT [Dow Jones]--Swedish private-equity firm EQT's bid for Cleanaway Waste Management looks opportunistic to Jefferies. Cleanaway has disappointed market expectations over the past five years despite owning assets that are difficult for rivals to replicate. "EQT's approach is therefore understandable, given the option to make changes to the business and deliver stronger cash flow growth in the medium term," says analyst Amit Kanwatia. EQT is offering A$3.13/share. That values Cleanaway's equity at A$7.0 billion. Cleanaway missed market expectations with Ebit guidance of A$500 million-A$530 million in FY27. "Therefore this bid does insulate shareholders from another disappointing result, while supporting the board's intention to recommend," Jefferies adds.

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