EQT Infrastructure has agreed to buy Cleanaway Waste Management, the Australian waste collector and landfill operator, for A$3.095 a share in cash, a deal Cleanaway says values the business at about A$9.3 billion including debt.
Cleanaway told the ASX on Monday 19 October, Sydney time, that it had signed a binding scheme implementation deed with Sedum Group Pty Ltd, an entity owned by funds managed or advised by EQT. The price is settled. The interesting part is what happened to the shares three days before it was.
What is EQT paying?
Shareholders are to receive A$3.095 in cash for each share, less the cash amount of any dividends paid before the deal completes. That is 3.5 cents below the A$3.13 that EQT proposed in August, because Cleanaway paid a FY26 final dividend of 3.5 cents a share on 8 October, the release said.
The headline figures are calculated on the old A$3.13, which Cleanaway says is consistent with an undisturbed share price that included the right to that dividend. On that basis the implied enterprise value, meaning equity plus net debt, is about A$9.3 billion, or about 20 times FY26 underlying earnings before interest and tax of A$470.2 million.
| Measure (to 12 August 2026) | Reference price | Premium stated by Cleanaway | |---|---|---| | Last close | A$2.37 | 32.1 per cent | | 1-month VWAP | A$2.33 | 34.2 per cent | | 3-month VWAP | A$2.33 | 34.5 per cent | | 6-month VWAP | A$2.34 | 34.0 per cent |
By this publication's arithmetic, the cash a holder will actually receive, A$3.095, is 30.6 per cent above the A$2.37 close. Equity value is about A$7.06 billion at A$3.13 on the release's 2,255.1 million shares and performance rights, or about A$6.98 billion at A$3.095. Premiums measured against different dates can tell different stories, as they did in Proofpoint's cash offer for Varonis last week.
Cleanaway may also pay dividends of up to A$0.19 a share before completion, which it expects to fall between A$0.145 and A$0.19 and to be fully franked where possible. Any such dividend comes off the A$3.095. It moves cash earlier and may carry tax credits for some holders. It does not raise the price.
Why did the ASX ask questions?
Because the stock fell sharply on Friday 16 October while the deal was still being negotiated. In a price query that day, ASX Compliance cited a move from a A$2.63 close on 15 October to a low of A$2.43, a fall of 7.6 per cent by this publication's arithmetic.
Cleanaway replied that it was not aware of any undisclosed information that could explain the trading and knew of no other explanation. It said it had updated the market on EQT's proposal on 12 October and would update it again before trading began on 19 October. It did, with the signed deed.
The fall looks like a market pricing in the chance that exclusive talks would collapse. That is our reading. Neither company has commented on the trading. The shares closed at A$2.99 on Tuesday 20 October, according to ASX market data, about 3.5 per cent below the offer by our arithmetic. That gap is what investors are charging for time and regulatory risk.
What could still stop it?
The conditions are customary but not trivial. The deed requires clearance from the Foreign Investment Review Board (FIRB), which advises the Treasurer on foreign takeovers, and from the Australian Competition and Consumer Commission (ACCC), as well as the competition authorities of Kuwait and Saudi Arabia. None of those four can be waived. The scheme also needs approval by the majorities the Corporations Act requires at a shareholder meeting, approval by the Federal Court and an independent expert, Kroll Australia, concluding that it is in shareholders' best interests.
The deed sets a break fee of A$69,794,325 payable by Cleanaway in specified circumstances, such as a director changing a recommendation or a rival completing a competing deal, and an identical reverse break fee payable by EQT if it fails to pay or materially breaches the deed. By our arithmetic that is about 1 per cent of equity value. The deal is also conditional on no material adverse change, which the deed defines as an event that cuts Cleanaway's EBITDA by A$123 million or more in a financial year or its net assets by A$300 million or more. It is not subject to financing.
Board chair Samantha Hogg said in the release that "the Board is unanimous in its view that the Scheme delivers strong and certain cash value to shareholders, at a significant premium to Cleanaway's undisturbed share price."
Who is buying, and what happens next?
The buyer is EQT Infrastructure VI, part of the Swedish investment group EQT, which reports about €354 billion of assets under management. EQT said the fund would be 85 to 90 per cent invested after the deal. Cleanaway says it employs more than 9,700 people at over 350 locations in Australia, New Zealand and the Middle East and runs a fleet of more than 6,200 vehicles. The deed lists 13 current and former landfill sites, including Lucas Heights in Sydney and the Melbourne Regional Landfill.
The deed's timetable has a scheme booklet sent to shareholders in mid-December, a vote before the end of February 2027 and implementation by the end of March. If it slips past 31 May 2027, holders earn a ticking fee of A$0.0002 a share a day. The end date is 1 September 2027.
The first test is the regulators. The ACCC's view on a private infrastructure fund owning a national collection and landfill network will decide whether the 3.5 per cent gap closes or widens.
The scheme terms, the A$3.095 and A$3.13 prices, the 3.5-cent FY26 final dividend paid on 8 October, the premiums, the enterprise value and EBIT multiple and their basis (2,255.1 million shares and rights, A$2,288.7 million of net debt and debt-like items, A$1.6 million of non-controlling interests, A$470.2 million of FY26 underlying EBIT), the permitted dividend of up to A$0.19, the conditions, the timetable, Kroll's appointment, Cleanaway's employee, site and fleet figures and the Samantha Hogg quotation come from Cleanaway's ASX release of 19 October 2026 and the scheme implementation deed attached to it. The break fee, reverse break fee, material adverse change thresholds, 1 September 2027 end date and ticking fee come from the deed. The ASX price query and Cleanaway's response are dated 16 October 2026. The 85 to 90 per cent invested figure for EQT Infrastructure VI comes from EQT's release of 19 October 2026. The A$2.99 closing price on 20 October is from ASX market data. The implied equity values, the 30.6 per cent premium at A$3.095, the break fee as a share of equity value, the 7.6 per cent fall and the 3.5 per cent gap to the offer are this publication's arithmetic. The analysis is our own.
Topics businessM&Aprivate equityinfrastructureAustralia
