estimates around $3.3 billion to $5 billion

Buyers courting Brambles businesses
03/05/2006 05:57:31 PM AAP

Brambles Industries Ltd's local waste management and industrial services businesses have attracted strong interest from potential buyers.

The logistics group remains on track to substantially complete the sale of Cleanaway and Brambles Industrial Services before the end of next month.

A Brambles spokesperson said trade and equity buyers had shown strong interest in both Australian businesses since the start of the sale process.

"We hope to have the process substantially completed by the end of June," he told AAP.

Brambles is selling its Cleanaway, Brambles Industrial Services and regional businesses so it can focus on its CHEP pallet and Recall document management operations.

The company has already sold Cleanaway Germany for $893 million, its northern hemisphere industrial services business, the US plastic container operations and its specialised tank container assets.

Amid speculation that prospective buyers will submit first-round bids for the Australian assets of Cleanaway and Brambles Industrial Services this week, there is also speculation in Britain that interested parties are about to submit their bids for Cleanaway UK.

The group estimates that the entire sell-off will generate as much as $2.8 billion in capital, which will be returned to shareholders and reinvested in its remaining businesses.

However, analysts put the total value of the sell-off even higher, with estimates ranging from around $3.3 billion to as much as $5 billion.

Shaw Stockbroking analyst Brent Mitchell said Transpacific Industries Group Ltd is the likely frontrunner in the sale of Cleanaway.

"With Transpacific and Waste Management NZ I think it's a very good fit given the complementary and expanded operations," he said.

"There's a bit more in the way of synergies to be worked through with Transpacific but they are extending themselves with Waste Management and Cleanaway as acquisitions."

Waste management company Transpacific has teamed up with investment firm CHAMP Private Equity to make a joint bid for both Cleanaway Australia and Brambles Industrial Services.

The latest bid follows Transpacific's acquisition of Waste Management NZ Ltd for $769 million in March.

Mr Mitchell said a private equity firm is the most likely buyer for Brambles Industrial Services as it will sell for a lower price and offered fewer synergies than Cleanaway.