- The 450p-a-share offer is at a 52% premium to Wincanton’s Thursday close price
Wincanton shares soared by almost half on Friday as French shipping group CEVA revealed a £566.9million takeover offer for the British logistics firm.
The 450p per share offer implies a Wincanton enterprise value of around £765million and is at a 52 per cent premium to the group’s closing share price on Thursday of 297p.
Marseille-headquartered CEVA Logistics, which has a logistics arm as well as sea, air, ground and rail freight operations, said the takeover ‘represents an attractive growth opportunity’ in the UK.
Wincanton shares were up 47.3 per cent to 437.5p in early trading.
Wincanton’s employs 20,300 staff across more than 170 sites around the country, and is responsible for approximately 8,500 vehicles.
CEVA Logistics also highlighted Wincanton’s ‘grocery and consumer expertise’ as part of its rationale for the deal, which it said would further develop its offering in contract logistics in the UK and Ireland.
CEVA, which is a subsidiary of CMA CGM, currently generates around $950million (£749million) of annual revenues in the UK and covers the entire supply chain through its subsidiaries. It generates around $15billion in annual revenues globally.
It said it would build on Wincanton’s ‘proven expertise’ in partnering with prominent grocers and retailers, while delivering ‘cost synergies, sharing best practices and making use of key talents from both sides’.
Wincanton, which counts supermarkets Asda, Sainsbury’s and Waitrose as well as retailers Screwfix and Wickes among its customers, suffered tough trading in 2023 as the squeeze on consumer spending hurt volumes at its e-fulfilment and consumer divisions.
Wincanton shares remain short of their May 2021 peak of 454p and were down by roughly 8.5 per cent in 2023.
The group’s board is backing the deal and said shareholders should approve the ‘fair and reasonable’ offer at an upcoming vote.
It said: ‘While the Wincanton Board is highly confident in the long-term prospects of the business as an independent listed company, it has considered the attraction to Wincanton Shareholders of the Cash Consideration due under the terms of the Acquisition against the backdrop of near-term macroeconomic uncertainty.
‘The all-cash consideration being offered… provides Wincanton shareholders with the opportunity to realise the value of their investment for all of their Wincanton Shares.
The board also cited the ‘limited liquidity’ of Wincanton shares as presenting ‘a challenge for Wincanton shareholders to otherwise monetise their holdings’, while arguing the group’s trading performance has not been reflected in its share price.
Lack of market liquidity and perceived undervaluation have been key drivers of a spate of private takeovers and delistings in recent years.
Wincanton employs 20,300 staff across more than 170 sites around the country, and is responsible for approximately 8,500 vehicles.
Should it pass a shareholder vote, the deal is expected to become effective this year.
Martin Read, chairman of Wincanton, said: ‘This offer for Wincanton… is testament to the strength of the business we have built, our strategy, our strong customer relationships and our excellent people.
‘CMA CGM is a highly-experienced operator in the industry, and as Wincanton becomes part of this larger business, it will be able to capitalise on the significant growth opportunities ahead.
‘In unanimously recommending this offer to shareholders, the directors believe it is in the interests of all the company’s stakeholders.
‘While we remain confident in the long-term prospects of Wincanton and the wider sector, we recognise that the strong performance of the company has not been reflected in the performance of its shares in recent years. We therefore believe this offer represents the best opportunity for shareholders to realise the value of their investment with greater certainty.’
Chief executive James Wroath added: ‘This offer will enable Wincanton to continue and accelerate the progress that has been made, providing an excellent partner with the balance sheet strength that will allow the pursuit of both existing and new growth opportunities.
‘CMA CGM’s strong track record of investing in its people and its commitment to its customers means that we are confident this offer will deliver benefits for all of our stakeholders.’
