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The twists and turns of the Panalpina saga continue. The very latest news is that investors have expressed concern over a Panalpina tie-up with Agility, with talks confirmed this morning.
The Swiss forwarder also confirmed a revised – all cash – Sfr180 per share offer from DSV, but as reported in The Loadstar Premium on 5 February, Panalpina is hoping to seal a deal with the Kuwaiti logistics company.
Panalpina said it was in talks with Agility on “potential strategic opportunities with regard to their respective logistics businesses. The discussions between the two companies are at a preliminary stage”.
Panalpina’s chief, Stefan Karlen, told media this week he was looking to grow the company through acquisition.
But not all shareholders agree – and investors have expressed serious concerns over the Agility deal, said to be with its Global Integrated Logistics arm.
Royal Bank of Canada said it doubted Panalpina would be able to pull off an integration with Agility.
In a research note issued this morning, and seen by The Loadstar, the bank says: “To us, other than as a defence mechanism, a combination with Agility is surprising.
“At last disclosure, the Panalpina SAP TM platform was not fully rolled out; it was not fully functional in all locations (and per competitor remarks, was not able to handle all volumes in the last peak where it was switched on). 100% roll-out and functionality was not expected even by end 2019E.
“To us, and thus for shareholders, we think it is highly questionable how [Panalpina] would be able to integrate with a new company/acquisition without further complication to its present challenges.”
It also cited weakening air freight demand as a problem, noting that it is Panalpina’s main source of ebit.
“To profit deliver growth organically, even if SAP TM can be rolled out on much faster timescale and works as it should, it nonetheless needs volume growth to drive the operating leverage this fixed cost platform could create. A weaker macroeconomic backdrop will, we think, make this harder to deliver.”
According to sources on The Loadstar Premium, there could also be some problems with corporate governance on any Panalpina-Agility tie-up, while Agility’s numbers are said to be “messy”.
Meanwhile, Loadstar Premium sources also indicated there is some concern about potentially ugly legal fallout should the Panalpina board reject DSV’s offer – and there is talk of possible “nasty tactics” from the Danish, who still want the Swiss forwarder.
Panalpina said this morning: “The board of directors of Panalpina confirms that it has received a revised, non-binding proposal from DSV to acquire the company at a price of Sfr180 per share, all in cash.
“According to its fiduciary duties, the board of directors of Panalpina is reviewing the revised proposal from DSV in conjunction with its professional advisers.”
Panalpina is being advised by UBS, while its main shareholder, the powerful Ernst Göhner Foundation, is being advised by Goldman Sachs. The foundation has not commented yet on the Agility deal.
The saga continues. Get yourself some popcorn, sit back and enjoy.