CMA CGM’s CEVA Logistics confirmed today that it will not be pursuing Wincanton reporting in a stock exchange filing that it will not set aside its previous final cash offer. The acquisition would have more than doubled CEVA’s operations in the UK and Ireland. They were outbid by American company GXO, representing a setback for the group’s efforts to further expand its logistics operations.
“CEVA felt that the Increased and Final Offer represented a very attractive opportunity for all Wincanton stakeholders, notably its employees, clients, and the Wincanton Shareholders,” they wrote in the filing. “CEVA confirms that it will not set aside the no price increase statement … not switch to a takeover offer. It is CEVA's intention that the Increased and Final Offer will lapse in due course.”
The takeover was initially agreed to between CEVA and Wincanton’s board on January 19 with the French group calling it “an attractive growth opportunity” that fit with its growth strategy for the logistics business. At the end of February, CMA CGM completed the larger acquisition of Bolloré Group’s logistics operations but at the same time, a rival appeared for Wincanton.
CEVA responded by increasing its offer by approximately seven percent but declared that it would be the final cash offer for Wincanton. U.S.-based GXO then moved forward topping CEVA’s reported best offer by 26 percent. The final price for Wincanton represents a more than 100 percent premium over the stock market valuation of the company.
“As a global leader, CMA CGM will continue deploying its growth roadmap, leveraging its clear business strategy and very robust balance sheet, while always maintaining a clear focus on value creation with financial discipline in any acquisition. CEVA Logistics and CMA CGM are committed to serving their clients and growing their presence in the United Kingdom which remains a core market for the CMA CGM group,” they wrote in announcing the decision not to compete further for Wincanton.
The board of the UK company last week withdrew its support for CEVA and instead accepted the higher cash offer from the Americans. CEVA under UK takeover rules had till tomorrow to declare its intentions. It could have either announced it was setting aside its previous final statement and increase the offer or as it did stand with its prior offer.
Wincanton, which is nearly 100 years old, was seen as a strong opportunity due to its broad relationships in retailing and other sectors in the UK. The company has more than 170 sites across the UK and Ireland and has shown strong growth recently, last year reporting revenues of more than $1.8 billion and EBITDA of nearly $154 million.
