What appeared to be a straight-forward purchase by CMA-CGM for the UK road and contract logistics provider Wincanton, has become more complicated. A competing offer has materialised and CMA-CGM has felt obliged to increase the price it is offering for Wincanton.
In a statement to the London Stock Market, Wincanton said that it had “received an approach from a potential competing bidder and is complying fully with its obligations under Rule 21.3 of the Takeover Code in providing access to due diligence information in order to enable that potential competing bidder to evaluate a possible offer for the Company”. Responding to reports in the media, Wincanton confirmed that the bidder was GXO, the contract logistics specialist that was formerly part of XPO. GXO already has a sizeable presence in the UK, having bought companies such as Clipper Logistics and TDG.
In response, CMA-CGM, through its acquisition vehicle ‘CEVA Logistics UK Rose Limited’, has stated that it has increased its offer by 6.67%, valuing Wincanton at “approximately £604.7 million on a fully diluted basis and values Wincanton at approximately £802.7 million on an enterprise value basis”. CMA-CGM describes this as an “Increased and Final Offer”. The statement outlining this new offer was published by Wincanton and it asserted that the “Increased and Final Offer Price is final and will not be increased, except that Bidco [CEVA Logistics] has the right to increase the offer price and/or otherwise improve the terms of the Acquisition (i) if there is an announcement on or after the date of this announcement of a possible offer or a firm intention to make an offer for Wincanton by any third party, or (ii) if the Panel otherwise provides its consent.” This would seem to imply that CMA-CGM is possibly willing to pay more to gain control of Wincanton. However, Wincanton’s board of directors seems to be very much supporting the CMA-CGM bid.
Whilst Wincanton has recovered from its problems of several years ago and is now a viable, growing business. However, it is a little surprising that such experienced buyers of companies as CMA-CGM and GXO are willing to pay so much for a company that is presently driven by the growth of the British retail market. They must be seeing substantial, unrealised value in Wincanton.
Author: Thomas Cullen
Source: Ti Insight
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