December 24, 2009 / 7:37 AM / 8 years ago

UPDATE 2-Carlyle says mulling bid for Shanks

* Carlyle says has held bid talks with Shanks’s board

* Says no certainty it will make formal offer

* Shanks shares unchanged at 131.60 pence

(Adds more detail)

By Rhys Jones

LONDON, Dec 24 (Reuters) - U.S. private equity firm Carlyle Group [CYL.UL] said it has talked to British waste management company Shanks Group SKS.L about a possible takeover offer.

Earlier this month, Shanks said it had received a 536 million pound ($855 million) approach worth 135 pence per share, but its board and key shareholders were looking for at least 10 percent more. [ID:nGEE5B609N]

Shanks shares, which have risen 50 percent in the past month largely due to bid speculation, were unchanged at 131.60 pence by 0905 GMT on Thursday.

    Carlyle said while it was “evaluating a possible cash offer” for Shanks and had held talks with the board, there was no certainty it would make an offer.

    On Wednesday, the Daily Telegraph newspaper reported Shanks had denied Carlyle access to its accounts after the private equity group refused to increase its offer, and that Shanks was prepared to talk to Carlyle at 150 pence per share.

    Analysts at Altium Securities have said an approach could prompt counterbids from other waste companies and private equity firms attracted by the steady returns from a business that often works with 25-year contracts.

    Sector rivals include French group Suez Environnement (SEVI.PA), while big-name private equity players such as Guy Hands of Terra Firma [TERA.UL] have bought waste and water companies in the past. (Editing by Matt Scuffham and Dan Lalor) ($1 = 0.6269 pound)

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