A bidding war has broken out at Wincanton after a new buyer entered the race for the logistics group and as a French suitor increased its offer to £605 million.
The supply chain specialist said that CMA CGM had increased its bid to 480p per share after the emergence of a “potential competing bidder” for the UK-listed business.
Sky News reported that GXO Logistics, the American owner of Clipper Logistics, was looking to make an offer and this afternoon Wincanton confirmed that it had received an approach from GXO.
In a statement, Wincanton said: “Although GXO has indicated that it is considering making a proposal for a cash offer, as of the date of this announcement, it has not provided the board of Wincanton with any formal proposal relating to a possible offer, including as to terms or price. If any such proposal is provided by GXO the board of Wincanton will carefully consider its terms, in conjunction with its advisers.”
Wincanton has provided the new suitor with access to the information required to perform due diligence and to assess whether to make a formal offer for the company.
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The Wincanton board has recommended that shareholders accept the offer made by CMA CGM as it represents a 62 per cent premium to the group’s share price before the deal became public on January 19.
Wincanton has about 8,500 vehicles delivering food and consumer goods, as well as building materials and fuel, from more than 170 locations throughout the UK. Its clients include Ikea, British Salt, EDF and BAE Systems. The company, which is based in Chippenham, Wiltshire, also operates storage facilities and home delivery services.
Aberforth Partners and the Wellcome Trust have agreed to support CMA’s bid in a vote on the deal by signing irrevocable undertakings. Threadneedle Asset Management, Schroders Investment Management and Polar Capital also have backed the proposal and CMA’s bid is now supported by institutional investors and directors holding 35.68 per cent of Wincanton’s listed share capital.
Wincanton’s share price suffered last year when it issued a profit warning and announced that it had lost a contract to provide border services to HM Revenue & Customs. The group lost a quarter of its market value on the day it revealed it would no longer handle the border points it had agreed to manage on “exceptionally shortened timescales” after Brexit. However, news of the growing takeover interest in the business sent the shares up by 12.3 per cent, or 55p, to 504p.
CMA CGM is one of the largest shipping groups in the world, with operations in more than 160 countries. It is based in Marseilles and has 155,000 employees and a fleet of about 600 vessels.
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Alexander Paterson, an analyst at Peel Hunt, the broker, said that CMA’s initial offer of 450p per share had been “too low” as Wincanton’s growth prospects had been undervalued by the market after the loss of the contract from HMRC. He said the group had been “starved of investment” in previous years as it had high debt levels and had been bringing down its pension deficit. Wincanton had now returned its pension scheme to surplus for the first time in decades, he said, and it could set aside previous plans for annual contributions of about £25 million.
Paterson said Wincanton could step up its investments in automation and robotics to produce more cost savings as part of CMA’s logistics group. “This investment will be critical in moving the business up the value chain and further differentiating itself from competitors,” he said.
Jacques Saadé, a French-Lebanese billionaire, founded CMA in 1978 and the group acquired its present name after a takeover of CGM in the 1990s. The company had global revenue of $74 billion in 2022.
The deals market appears to have picked up momentum as fears about further interest rate rises from the Bank of England recede. Currys became a possible target for a bidding war last week when it emerged that both Elliott Advisors, the American activist investor, and JD.com, the Chinese ecommerce company, could be vying for the electricals retailer.
