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By Massimo Gaia and Stephen Jewkes
MILAN Nov 7 Italian waste management operator
Waste Italia is in talks to sell the company to China's Sound
Global, the main shareholder of Waste Italia said on
"They made an offer in July which we judged inadequate. They
have now relaunched and we are starting to work on it," Pietro
Colucci told Reuters in an interview.
Colucci, the head of Italian renewable energy company
Kinexia, owns 63.7 percent of Waste Italia, the
country's largest private manager of industrial waste.
Italian private equity firm Synergo owns another 32.7
percent. It is keen to exit its investment but to date no
solution palatable to both investors has been found.
To meet Synergo's demands, Colucci has agreed to the talks
with water and waste treatment provider Sound Global, which has
a market value of around $730 million.
Colucci said if a deal with the Asian group did not happen,
Waste Italia would be merged with Kinexia, with Synergo
receiving Kinexia shares that it could then sell - an option he
"Synergo is pushing to sell the whole company while our idea
would be to merge Waste Italia with Kinexia and increase the
critical mass to become a national player," he said.
Italy's waste management sector is drawing considerable
attention from domestic and foreign investors as new European
Union regulations prompt change in a country where landfills
rather than waste-to-energy plants are the norm.
The sector is fragmented with waste services in the hands of
small local utilities. Colucci said a merger with Kinexia would
create a national player able to bring on board other operators.
"In around 5-6 months we will know what the destiny of Waste
Italia is," he said.
Waste Italia, which according to Colucci has an equity value
of 85-90 million euros ($114-120 million), expects revenues this
year of around 83 million euros.
($1 = 0.7472 euros)
(Editing by Pravin Char)