Why has the Macquarie share price been thrashed 10% in a fortnight?

Macquarie reportedly lost a takeover bid for Suez Recycling and Recovery UK last week.

Key points
  • A consortium of companies has stepped in to rip the proposed acquisition from Macquarie's hands
  • The consortium exercised their right of refusal, which pushed Macquarie out of the picture
  • Still, Macquarie is on a steady acquisition trail

The Macquarie Group Ltd (ASX: MQG) share price is down 10.6% in two weeks. Last week the bank lost a proposed takeover bid for Suez Recycling and Recovery UK.

A consortium of companies has pushed in on Macquarie's acquisition of Suez, as reported by the Australian Financial Review.

Last Wednesday night, the consortium was said to exercise its right of refusal, which put Macquarie out of the picture.

The article reports that members of the consortium include the companies Meridiam, Global Infrastructure Partners, Caisse des Depots Group, and CNP Assurances. My Fool colleague Bernd notes, this is the same group of companies that own Suez's operations in France.

Before Macquarie's deal fell apart, Britain's market regulator had instructed French waste management giant Veolia, which owns Suez Recycling, to divest the business on antitrust concerns that were raised in May.

The divestment was deemed necessary as it could lead to anti-competitive practices, potentially leading to higher consumer prices.

A spokesperson for Macquarie made the following comments on the failed bid:

As previously announced, our proposed investment in Suez's UK recycling and recovery operations was subject to the satisfaction of certain closing conditions, including a right of first refusal. We look forward to identifying other opportunities in the sector where we can support the transition to a more sustainable, circular economy.

Macquarie reportedly offered to buy the company for 2.5 billion euros (AU$3.7 billion).

While Macquarie's acquisition of Suez has apparently fallen apart, the company could have other irons in the fire. In March, it was speculated that Macquarie could be eying up the wealth division of Westpac Banking Corp (ASX: WBC), which could be worth $1 billion.

A group of disappointed board members.

Image source: Getty Images

Macquarie share price snapshot

The Macquarie share price is down 21% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 13% over the same period.

The company's market capitalisation is $63.98 billion.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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