News / Wincanton bidding war begins as GXO steps in with better offer than Ceva

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A fully fledged bidding war over UK contract logistics operator Wincanton erupted this morning when GXO submitted a formal bid that represented a 26% increase on CMA CGM-owned Ceva’s updated offer.

GXO’s offer price of £6.05 per share values Wincanton at approximately £762m on a fully diluted basis, and approximately £764m on an enterprise value basis – which compares with Ceva’s improved offer  this week of £4.80 per share.

A GXO London Stock Exchange filing says it “represents an increase of £1.25 per Wincanton share and, in aggregate, approximately £157m in the total offer value on a fully diluted basis” on Ceva’s offer.

“Accordingly, GXO expects that the Wincanton board will recommend the acquisition in due course,” it added.

GXO CEO Malcom Wilson, who has worked in the UK logistics market since the mid-1990s and is well acquainted with Wincanton, explained: “Wincanton is a world-class business and we have long been impressed by its high-quality people and diverse customer relationships across key industries.”

“The combination of GXO’s technological capabilities and global reach with Wincanton’s proven expertise in the UK and Ireland markets will enhance our offering for the benefit of both companies’ current and future customers. Our superior offer reflects our conviction in the value of this business and the opportunities the combined company will realise.”

GXO added that it had particularly been attracted by Wincanton’s exposure to the aerospace, utilities, industrial and healthcare verticals, and would provide “GXO with a springboard to offer industrial services across Europe.

The LSE filing notes that “GXO has a market-leading service platform for aerospace and defence in the US, and the combined company will enhance service for UK customers in that vertical by leveraging GXO’s capabilities and expertise”.

If the offer is accepted, and cleared by competition authorities, the deal would catapult GXO to become the largest contract logistics player in the UK, overtaking DHL Supply Chain, and could take its market share of the UK’s outsourced logistics to close to 30%, according to Loadstar Premium calculations, derived from Transport Intelligence data.

It would also represent GXO’s second big-ticket UK acquisition, after the £1bn 2022 purchase of Clipper Logistics, and Mr Wilson today stressed GXO’s past experience in executing acquisitions.

“GXO has a long heritage in the UK and a demonstrated track record of seamlessly integrating businesses in this market. We’re proud that our operations support the growth of UK companies, create high-value jobs, and enhance the communities where we operate.

“As a focused pure play logistics leader, we are committed to investing in superior, differentiated logistics solutions, and we are confident that this combination will generate significant value for our shareholders, customers, and employees alike.”

GXO added that it expected the deal would lead to some £45m in annual synergies, “based on procurement and other operational overlap that can be realised by the third year of integration”.

Wincanton’s share price climbed 20% today, to hit a high of £6.13 from a starting position of £5.08.