News / Clipper Logistics and GXO reach agreement on cash and share offer

Clipper Logistics is set to recommend a cash and share offer from GXO to its shareholders, subject to the usual due diligence and agreement on detailed terms and conditions.

GXO’s cash and share offer for the e-fulfilment company is valued at around $1.3bn, according to The Loadstar Premium.

The deal consists of 690p ($9.38) per share in cash and new GXO shares that “would imply a valuation of 230 pence [per share] based on the trailing GXO three-month volume weighted average price and a trailing three-month average US$/sterling exchange rate, in each case calculated for the period ending on the last practicable date prior to any firm offer announcement”.

However, the offer comes with a warning to Clipper shareholders that its total value at current exchange rate levels may differ “at the point of announcement of a firm offer”.

Nevertheless, GXO’s chief of strategy officer, Neil Sheldon, was upbeat about the possible deal and told The Loadstar it would allow the company to enter the life science business, delivering items such as lateral flow tests directly to consumers.

Moreover, the deal would add to the company’s geographical reach, expanding its markets to Poland and Germany.

The vertical integration of GXO into the life sciences sector would follow last year’s acquisition of Kuehne + Nagel’s UK operations, which gave the company access to the telecoms industry.

In the six months ending 31 October, 68% of Clipper’s logistics revenue was generated from e-fulfilment and returns management activities. Clipper developed its specialist services, including electronic product repair capability, through its acquisition of Dutch company CE Repair, announced in November.

In addition to its presence in the UK, Poland and Germany, Clipper has increasing business in the Republic of Ireland, the Netherlands and Belgium.