Directors of takeover target Wincanton, the UK logistics group, have performed a dramatic u-turn by ditching their previous support for one bid for the business and throwing their weight behind a rival offer.
The unusual manoeuvre means shareholders of the Chippenham-headquartered group are being recommended to accept the 605p-a-share offer made by US-owned global operator GXO Logistics yesterday rather than the 480p-a-share bid from French-owned shipping giant CMA CGM received earlier this week.
As reported by Bath Business News on Tuesday, GXO surprised Wincanton’s directors by demanding access to due diligence information following CMA’s “increased and final cash offer”, saying it would enable it “to evaluate a possible offer for the company”.
Yesterday the group, which owns Clipper Logistics in the UK, sprung its higher bid, prompting the Wincanton board today to switch sides.
GXO’s offer values Wincanton, which has 20,300 employees and 8,500 vehicles in more than 170 sites across the UK, at £762m against CMA’s £604.7m.
Wincanton chairman Sir Martin Read CBE said today: “We have long been clear that Wincanton is a great business with a compelling strategy, strong customer relationships and excellent people.
“Under the current management team, we have made positive progress and ensured that Wincanton is at the forefront of logistics innovation.
“The board of Wincanton is pleased that GXO recognises the very significant value inherent in this business and intends to recommend the offer to shareholders for their consideration."
Wincanton shares were this afternoon trading at 625p, a 110% increase on their price on 18 January, the day before CMA’s initial offer.
CMA already operates in the UK under the CEVA brand, including in Filton, Bristol, where it has a major warehouse.
Clipper Logistics, which was snapped up by GXO in 2022 for £1bn, also has a base in Bristol.
Cash-rich CMA, which is privately controlled by the Franco-Lebanese billionaire Saade family, has been on an acquisition spree in recent years, including snapping CEVA in 2019 and freight forwarder Gefco, which also has a base in Bristol, in 2022.
At the time of its initial bid it said buying Wincanton represented an attractive growth opportunity in line with CEVA's expansion strategy.
GXO recently reported full-year earnings of $741m (£585m) on revenues of $9.8bn.
The group employs around 130,000 people across its 970 locations in 27 countries. In total it operates 200m sq ft of warehouse space.
In its bid offer it said acquiring 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 added: “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.”
In January Wincanton warned it was facing a “challenging trading environment” as it reported a 5% year-on-year increase in revenue. Its best-performing division continued to be eFulfilment, which has become a more important part of the business over recent years.
It increased revenue by 8.1% year-on-year, driven by the strong performance from contracts with IKEA, Wickes and The White Company.
Wincanton’s full portfolio of clients range from retailers such as New Look and Sainsbury to defence and industrial customers such as EDF and BAE System.
