Takeover threatens Shanks & McEwan
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SHANKS & McEwan, the troubled waste management company, has become a possible takeover target for Ocean Group, the shipping and environmental services group.
Shanks, in which Hanson, the industrial conglomerate, owns nearly 5 per cent, has long been regarded in the City as vulnerable to a bid due to ill- fated diversification and severe management problems.
But this is the first time Ocean, whose chief executive, Nicholas Barber, leaves the group later this year, has emerged as a possible predator.
Ocean is believed to have carried out a detailed corporate investigation into Shanks, which reported a pounds 6m annual loss and slashed its dividend last week.
The due diligence work for a possible raid on the Glasgow- based group, covering its operations, finances, environmental risks and commercial potential, is understood to have cost hundreds of thousands of pounds.
With its share price languishing at 85p last Friday, Shanks is well within the reach of Ocean, with a market value of more than twice that of its target at about pounds 450m.
But any bid for Shanks would represent a dramatic push by Ocean into the waste management industry. Although the group has quietly expanded its activities in the sector through its subsidiary Cory Environmental, its involvement is still modest.
Shanks's annual sales of pounds 100m make it the second biggest waste group in the UK. But its weak financial state - which has taken the shares near to an all-time low from a 1991 peak of 319p - could provide a bidder with the opportune moment to strike.
Some experts also believe that Shanks, with a strong market in the North, would make a good fit with Cory, which is concentrated in the South-east. In addition, Cory's landfill site at Mucking, Essex, was recently refused planning permission for the extension of its life beyond 2002. But Shanks has an available site in nearby Bedfordshire.
Although Rechem, Shanks's hazardous waste business, is facing an uncertain future due to a threatened government ban on imports of lethal waste into the UK, industry experts say Rechem's plants could still be valuable to a bidder with long-term ambitions.
Michael Averill, Shank's chief executive, who took over last month, said: 'We don't feel vulnerable to a bid.'
No one at Ocean could be reached for a comment.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments