Cleanaway Says EQT Is Proceeding With 100% Acquisition Proposal

Cleanaway Waste Management said EQT Infrastructure has confirmed that it remains committed to pursuing its proposal to acquire 100% of the Australian waste-management company, moving the potential takeover closer to a binding agreement after a period of due diligence. The parties are still negotiating an implementation deed, and Cleanaway cautioned that there is no certainty the proposal will become binding or ultimately proceed.

EQT’s latest written confirmation is more consequential than a routine due-diligence update. Cleanaway said EQT reported that nothing identified in its review is likely to cause it to stop pursuing the acquisition on the proposal’s stated terms, that it does not intend to make the terms less favorable to Cleanaway shareholders, and that it is committed to consideration no lower than the indicative offer price.

In its September 14 ASX announcement, Cleanaway also said EQT committed to enter into an implementation deed on or before the expiry of the exclusivity period established under the parties’ process deed. The hard-exclusivity phase has already ended, but confirmatory due diligence is continuing while the two sides work through the documentation needed for a binding agreement.

EQT’s commitment narrows one source of uncertainty

The central change is that EQT has now provided the written confirmations contemplated by the process deed after carrying out due diligence. For shareholders, that narrows one source of uncertainty around the proposal because EQT has said its review has not uncovered anything likely to make it walk away on the stated terms or seek less favorable terms.

That does not mean Cleanaway has been sold. Confirmatory work is still under way, the implementation deed has not been signed, and Cleanaway continues to say there is no certainty that a binding proposal capable of being put to shareholders will emerge. The distinction matters because the August approach was expressly conditional and non-binding.

Cleanaway first disclosed the current proposal on August 13. EQT offered an indicative cash price of A$3.13 per share to acquire all Cleanaway shares through a scheme of arrangement, with the cash amount subject to adjustment for dividends or other distributions declared or paid after the proposal. Cleanaway’s FY26 results later said the 3.5-cent final dividend reduced that figure to A$3.095 per share under the agreed price mechanics.

The proposal also provides for a ticking fee if implementation occurs after March 31, 2027. Cleanaway’s annual report says the consideration would increase by 0.02 cents per share for each day after that date until implementation. The company has therefore disclosed both a downward adjustment for qualifying distributions and a time-based increase if completion extends beyond the specified date.

Cleanaway’s directors have previously said they intend to recommend the proposal if the parties execute a binding scheme implementation deed at an acceptable price and on acceptable terms. That intention remains subject to the absence of a superior proposal and to an independent expert concluding that the proposal is in the best interests of shareholders, so the board’s current position is supportive but conditional.

Cleanaway is entering the process from a stronger earnings base

The acquisition proposal is being considered against a business that reported higher underlying earnings and stronger free cash flow in its latest financial year. For FY26, Cleanaway reported gross revenue of A$4.37 billion and net revenue of A$3.74 billion, while underlying EBIT rose 14.2% to A$470.2 million.

Free cash flow increased 63.7% to A$213.8 million, and the company declared a fully franked final dividend of 3.5 cents per share. Cleanaway also guided to FY27 underlying EBIT of A$500 million to A$530 million, which gives shareholders a current operating baseline against which to assess EQT’s proposal if it progresses to a formal vote.

Those results also help explain why the price adjustment for the final dividend is relevant rather than incidental. The dividend is payable on October 8 to shareholders on the register at September 14, and Cleanaway has said the A$3.13 indicative price is reduced by distributions covered by the proposal terms. Shareholders entitled to the dividend would therefore receive that cash from Cleanaway while the acquisition consideration is adjusted by the corresponding amount.

Cleanaway describes itself as Australia’s leading total waste solution provider. Its September update said the group has more than 9,700 employees across more than 350 locations in Australia, New Zealand and the Middle East, with a fleet of more than 6,200 vehicles and a network that includes recycling facilities, transfer stations, engineered landfills, liquid-treatment plants and refineries.

The operating scale puts the proposal in context. EQT is seeking ownership of a large network providing waste, recycling and industrial services, so the value shareholders may eventually be asked to consider is tied to an established asset base and broad service operations rather than a single project.

A binding deed would start the formal scheme process

If Cleanaway and EQT sign an implementation deed, the acquisition would still have several formal steps to clear before ownership could change. The proposal is structured as a scheme of arrangement, a court-supervised process under Part 5.1 of Australia’s Corporations Act in which shareholders receive detailed scheme materials and vote on the proposal.

ASIC’s guidance on schemes of arrangement explains the regulator’s role in reviewing scheme documents and in deciding whether to provide a statement of no objection under section 411(17)(b). Court steps are also part of the process, which means signing an implementation deed would be an important milestone but would not by itself complete the acquisition.

An independent expert’s assessment is also central to the board’s stated recommendation. Cleanaway has said its directors’ support is conditional on the expert concluding, and continuing to conclude, that the proposal is in shareholders’ best interests. Shareholders would therefore receive more detailed information before being asked to make a decision if the parties move from the current non-binding proposal to a formal scheme.

For now, Cleanaway has told shareholders that they do not need to take any action. The next concrete milestone is whether the company and EQT execute the implementation deed before the relevant exclusivity period expires, because until that document is signed the proposed 100% acquisition remains a non-binding proposal rather than a completed or fully committed sale.