News / Ceva prepared to dig deeper if there is a bidding war for Wincanton

The prospect of a bidding war developing over Wincanton has emerged after the UK pure-play contract logistics operator disclosed it had received an approach from a possible rival suitor to CMA CGM-owned Ceva Logistics.

Wincanton told the London Stock Exchange it had received an enquiry from an undisclosed potential acquirer and had provided “access to due diligence information in order to enable that potential competing bidder to evaluate a possible offer for the company”.

It added: “Although the potential competing bidder has indicated that it is considering making a proposal, as of the date of this announcement, it has not provided the board of Wincanton with any formal proposal.

“If any such proposal is provided by the potential competing bidder, the board of Wincanton will carefully consider its terms, in conjunction with its advisers.”

But it added: “There can be no certainty that an offer by the potential competing bidder will be made for the company, nor as to the terms on which any offer might be made.”

However, in a sign that Ceva is preparing to do battle for control of Wincanton – a deal that would significantly boost its market share of the UK contract logistics sector – it immediately responded by increasing its offer by 6.67%, valuing Wincanton at £604.7m ($767.6m) on a fully diluted basis, and £802.7m in terms of enterprise value.

Its original offer of £4.50 per share valued Wincanton at £567m on a fully-diluted basis, implying £764.9m in enterprise value.

Ceva said this represented its final price, “except that Bidco [the bidding company set up by Ceva and CMA] has the right to increase the offer price and/or otherwise improve the terms of the acquisition 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”.

Its improved offer added that it would be “financed in cash by Bidco from existing cash reserves of CMA CGM”.

Ceva also detailed, in the revised offer document, that it had so far received “irrevocable” undertakings from holders of 16.16% of Wincanton’s issued shares to sell their holdings to Bidco, while a further 19.42% had sent letters of intent to accept the original offer.

“The total number of Wincanton shares which are, therefore, subject to irrevocable undertakings or letters of intent received by Bidco from Wincanton shareholders is 44,438,298 shares, representing approximately 35.68% of the issued share capital,” it said.

Meanwhile, it has also emerged in an acquisition scheme document published by Bidco that – as predicted by Loadstar Premium – the deal would not be scrutinised by the UK’s Competition and Markets Authority, or its Irish counterpart.

“Bidco is pleased to confirm: (i) that the Competition and Markets Authority has responded to a briefing paper in writing confirming that it requires no further information in relation to the acquisition at this stage (and has not otherwise opened a merger investigation or implied that it is still investigating whether to open a merger investigation); and (ii) the Irish merger control authority, the CCPC, has confirmed in writing that it has approved the acquisition,” it said.

Wincanton’s share price climbed 11.8% today to reach £5.02 per share.