Cascal urges shareholders to reject Sembcorp offer, saying $6.75 per share is too low

Cascal urges shareholders to reject Sembcorp offer

SEATTLE — Water and wastewater service provider Cascal NV urged shareholders to reject a buyout offer from Sembcorp Industries Ltd. Tuesday, saying the offer of $6.75 per share is too low.

Singapore-based environmental services company Sembcorp Industries Ltd.’s subsidiary, Sembcorp Utilities, made the unsolicited offer for London-based Cascal in May.

Cascal said its board believes the offer substantially undervalues the company. It recommended that its shareholders not tender their shares. The board also asked shareholders who have agreed to sell their shares to withdraw them.

In a statement, Cascal said it reached out to Sembcorp three times since the offer was made to try to negotiate better terms, but Sembcorp refused to engage.

Cascal is looking for alternatives to the deal.

Biwater Group, which owns about 59 percent of Cascal, has agreed to sell its stake to Sembcorp. Cascal said it believes Biwater agreed to the sale because of its own “significant financial stress” and pressure from its main lender, HSBC.

The offer is expires June 21.

Shares of Cascal rose 11 cents to $6.66 in afternoon trading.