Cleanaway has signed a binding scheme implementation deed for EQT Infrastructure to acquire the waste services group for approximately $9.3 billion. Shareholders are being offered $3.095 cash per share, subject to approvals and any dividends paid before completion.
- $3.095 cash-per-share scheme consideration
- Approximately $9.3 billion enterprise value
- 34.5% premium to Cleanaway’s three-month VWAP
- Board unanimously recommends the scheme
- Completion targeted for March 2027, subject to conditions
EQT turns its Cleanaway proposal into a binding deal
After weeks of due diligence and negotiations, EQT Infrastructure has signed a scheme implementation deed to acquire 100% of Cleanaway Waste Management Limited (ASX:CWY). The proposed cash deal values Cleanaway at an enterprise value of approximately $9.3 billion and gives shareholders a defined path to exit at a substantial premium.
Under the scheme, shareholders will receive $3.095 per share, less the cash amount of any dividends paid before implementation. That price represents a 34.5% premium to Cleanaway’s three-month VWAP before EQT’s indicative proposal was announced, and implies an enterprise value of about 20 times FY26 underlying EBIT. The comparison uses an indicative $3.13 per share value before the 3.5-cent FY26 final dividend was paid.
The deal gives Cleanaway shareholders more certainty than the earlier non-binding proposal, which had remained unfinished while the parties worked through due diligence and transaction terms. The company had recently disclosed that EQT’s exclusivity period was being extended as the talks moved towards a deed, after the process had previously advanced without a binding agreement through the extended EQT exclusivity period.
Board backs cash offer while preserving dividend option
Cleanaway’s board unanimously recommends that shareholders vote in favour of the scheme, provided there is no superior proposal and Kroll Australia, the appointed Independent Expert, concludes that the transaction is in shareholders’ best interests. Directors also intend to vote their controlled shares in favour on the same conditions.
The board may declare aggregate cash dividends of up to 19 cents per share before implementation, with the current expected range set at 14.5 to 19 cents. Any such payment, including a potential fully franked special dividend, would be deducted from the $3.095 scheme consideration. Its final size, timing and franking level remain subject to board approval, available franking credits, retained earnings and tax advice.
Cleanaway Chair Samantha Hogg said the board had assessed EQT’s proposal against the company’s standalone value, including the opportunities and investment required under Blueprint 2030 2.0. The board’s conclusion comes after the earlier EQT due diligence clearance, which the bidder said had not identified an issue likely to derail the proposal.
Regulatory and shareholder hurdles remain
The transaction is not subject to a financing condition, but it still faces approvals from the Foreign Investment Review Board, the Australian Competition and Consumer Commission and competition authorities in Kuwait and Saudi Arabia. Cleanaway shareholders must approve the scheme, followed by Federal Court approval, while specified change-of-control consents for material contracts are also required.
A scheme meeting is expected before the end of February 2027, with implementation targeted for the end of March, although the company cautioned that the timetable may change depending on regulatory approvals. The scheme also contains limited termination rights, break-fee arrangements and customary exclusivity provisions, including restrictions on competing approaches subject to fiduciary exceptions and matching rights.
Bottom Line?
The headline price is now locked into a binding process, but the final cash outcome will depend on the dividend decision, the Independent Expert and a chain of regulatory, court and shareholder approvals.
Questions in the middle?
- Will Kroll conclude that the cash consideration is in shareholders’ best interests once Cleanaway’s standalone growth plans are assessed?
- How much of the potential special dividend can be franked, and how will it affect the final scheme consideration?
- Can the transaction clear Australian and Middle Eastern competition reviews in time for the proposed March 2027 implementation?