It has now been confirmed that GXO has submitted a formal cash offer for Wincanton to compete with CMA CGM, which itself submitted an increased offer for the acquisition of the company by one of its subsidiaries earlier in the week [26 February 2024].
As reported by Logistics Manager in January 2024, terms of a recommended cash offer were agreed by third-party logistics company Wincanton and Bidco, a wholly-owned subsidiary of CEVA Logistics, itself a subsidiary of CMA CGM.
This initial offer proposed a price of £4.50 in cash for each Wincanton share held. The offer was for ‘the entire issued and to be issued share capital of Wincanton’, valued at c. £566.9 million, with Wincanton valued at c. £764.9m on an enterprise value basis.
On 26 February 2024, weeks on from this initial offer, Bidco made an ‘increased and final offer’ for Wincanton, which would see Wincanton shareholders receive £4.80 for each share.
According to the official offer document, ‘the increased and final offer price is final and will not be increased’, with one exception being if ‘a possible offer or a firm intention to make an offer for Wincanton’ by a third party were announced.
Not long after this, it seemed likely that a rival offer would, in fact, be made. Wincanton released a statement later that day saying that it had ‘received an approach from a potential competing bidder’.
While this potential bidder was initially unnamed, the logistics company went on to confirm just hours later it was GXO that approached the Wincanton board. This confirmation followed ‘press speculation’ after the original announcement of a potential second bidder that morning.
This interest manifested itself on the morning of 29 February 2024 in the form of a cash offer from GXO for Wincanton. If this alternative deal were accepted, Wincanton shareholders would receive £6.05 in cash.
As stated in the offer document, ‘the GXO board believes the combination with Wincanton would advance GXO’s position as a global pure-play contract logistics leader by expanding its presence in a key market, enhancing its capabilities to better serve customers and drive long-term shareholder value creation’.
It adds that ‘the combination has compelling strategic and financial logic and represents an opportunity for GXO to capitalise on exciting, structural growth opportunities within the UK and Ireland’.
Malcolm Wilson, CEO of GXO, said: “Wincanton is a world-class business, and we have long been impressed by their 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 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.”
Logistics Manager contacted Wincanton but it declined to comment.
