Cleanaway Shares Rise 3.70% to $2.665 as EQT's $9.4 Billion Takeover Bid Clears Due Diligence Hurdle

SYDNEY — Shares in Cleanaway Waste Management Ltd. rose 3.70% to $2.665 on Monday, adding 9.5 cents, as investors continued to price in the prospect of a takeover after Swedish private equity firm EQT Infrastructure confirmed over the weekend that its multibillion-dollar offer for the company remains intact following the completion of exclusive due diligence.

Cleanaway told the market on Saturday that the hard exclusivity period under its Transaction Process Deed with EQT had ended as planned, and that EQT had confirmed nothing uncovered during its review would cause it to withdraw or reduce its indicative proposal. The two parties are now working toward negotiating a binding scheme implementation deed, though no such agreement has yet been reached, and the offer consideration remains at least at the previously indicated level.

The update extends a takeover saga that began in mid-August, when EQT Infrastructure lobbed a conditional, non-binding proposal to acquire 100% of Australia's largest waste and recycling company for $3.13 cash per share, implying an enterprise value of roughly $9.4 billion. That offer represented a 32.1% premium to Cleanaway's last closing price of $2.37 before the announcement, and a similar premium to the stock's one-month and three-month volume-weighted average prices. If completed, the deal would rank among the largest take-private transactions in Australian corporate history.

Cleanaway's board granted EQT up to nine weeks of exclusive due diligence to negotiate the terms of a binding transaction. In its original announcement to the market, the board stated: "After careful consideration and consultation with its advisers, the Cleanaway board has determined that it is in the best interests of Cleanaway shareholders to provide EQT Infrastructure with the opportunity to undertake up to nine weeks exclusive due diligence and to negotiate a scheme implementation deed (SID) to agree a binding transaction." The board added at the time that, subject to a deed being executed at a price no less than $3.13 per share and on otherwise acceptable terms, directors intend to recommend shareholders vote in favor of any scheme of arrangement.

Even so, Cleanaway has been careful to temper expectations while talks continue. The company reiterated in its original filing that "there is no certainty the proposal will lead to a binding proposal for consideration by Cleanaway shareholders or that any transaction will eventuate," and said shareholders do not need to take any action while the proposal remains under negotiation. That same cautious framing carried through to Saturday's update, with the company again noting it will provide further updates as developments occur.

The proposal remains subject to a number of conditions beyond the completed due diligence, including the negotiation and execution of a formal scheme implementation deed, an independent expert concluding the transaction is in shareholders' best interests, the absence of a superior competing proposal, and regulatory approvals including sign-off from the Foreign Investment Review Board. EQT has engaged Cleanaway with financial advisers Barrenjoey and Macquarie Capital and legal adviser Ashurst Perkins Coie working on the transaction for the target company.

The takeover interest comes as Cleanaway has been posting improved underlying financial performance. The company reported fiscal 2026 underlying EBIT of approximately $470 million, up 14% on the prior year, with the result supported by strong performances in its Solid Waste Services and Contract Resources divisions, along with better-than-expected management of cost impacts tied to the Middle East crisis. Cleanaway has guided to underlying EBIT of between $500 million and $530 million for fiscal 2027.

The offer price under EQT's proposal is structured to be reduced by the cash amount of any dividends or distributions Cleanaway declares or pays after the date of the proposal, though the deal also contemplates the potential for a fully franked special dividend to deliver additional value to shareholders, subject to their individual tax positions. The indicative price would also be adjusted by a small daily "ticking fee" if implementation of any transaction occurs after March 31, 2027, a mechanism designed to compensate shareholders for extended delays in closing the deal.

Cleanaway has also flagged some unresolved legal matters that could attract scrutiny during the ongoing negotiations. A Victorian Supreme Court ruling found the company owed $6.9 million in underpaid landfill levies for fiscal 2018, with further alleged underpayments of $4.7 million for fiscal 2019 and $7.2 million for fiscal 2022 still to be resolved. While modest relative to the scale of the proposed transaction, the matter has been noted as a factor that may draw attention during the deal process.

The company has also been navigating a leadership transition in its finance function. Chief Financial Officer Paul Binfield is departing the role, with Nigel Simonsz appointed as his successor effective September 1. Binfield is expected to remain with the company through the first half of fiscal 2027 to support the FY26 reporting process and ensure an orderly handover.

Monday's share price gain came as part of a broader rebound across the Australian market, with Cleanaway named among a handful of stocks catching a bid as the S&P/ASX 200 clawed back a portion of the prior week's losses. Even with the latest gain, Cleanaway shares remain below EQT's indicative offer price of $3.13, reflecting ongoing uncertainty in the market about whether a binding deal will ultimately be signed.

Cleanaway's next scheduled shareholder event is its annual general meeting, set for October 22, at which investors are likely to press the board for further detail on the state of negotiations with EQT. Until a binding scheme implementation deed is reached, the company has said it will continue operating as usual, with shareholders urged to watch for further announcements as the process unfolds in the weeks ahead.