Reuters: Private Equity: UPDATE 1-Australia's Brambles scraps $2 bln sale of Recall unit

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UPDATE 1-Australia's Brambles scraps $2 bln sale of Recall unit Jun 4th 2012, 00:51 Sun Jun 3, 2012 8:51pm EDT * Choppy markets, low valuations behind decision to scrap sale * Plans to raise $432 mln in equity at 10.9 pct discount * Failed Recall sale results in pretax costs of $25 mln MELBOURNE, June 4 (Reuters) - Australia's Brambles Ltd , the world's leading pallet supplier, said on Monday it has decided not to sell its $2 billion Recall information management business because of low offers, adding to a long list of deals pulled due to choppy markets. At least five large Asian IPOs were postponed or pulled last week, including the $3 billion listing of motor sport racing company Formula One in Singapore, as the euro zone crisis and slowing growth in China rattled investors. Brambles said it will instead raise A$448 million ($432 million) in equity to retire debt after it abandoned the 10-month sale process for Recall that had attracted trade and private equity suitors. "Amid challenging capital markets conditions, and following complex negotiations, offers from bidders for Recall did not reflect its value or offer sufficient certainty," Brambles said in a statement. Sources had told Reuters last month that Brambles had held talks with document destruction company Shred-it and Ohio-based Cintas Corp about Recall. Earlier in the year, several private equity firms, including Apollo Global Management, Thomas H. Lee Partners and Onex Corp, considered buying Recall, but their interest cooled due to a substantial gap in valuations, sources said. Brambles said it will undertake a 1-for-20 pro rata entitlement offer to raise A$448 million ($432 million) at A$6.05 per share, a discount of 10.9 percent to its last closing share price. The company also reaffirmed its 2012 fiscal year underlying profit guidance of $1.05 billion to $1.08 billion although that excludes pretax costs of about $25 million for the failed Recall sale. Link this Share this Digg this Email Reprints

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