GXO Logistics Ignites Bidding War For UK's Wincanton, Outbids CEVA Logistics

GXO Logistics, Inc. GXO on Thursday made a cash offer to acquire U.K.’s Wincanton plc.

Under the terms of the offer, each Wincanton shareholder will be entitled to receive 605 pence in cash for each share held.

GXO said its offer represents a premium of approximately 26% to the increased and final offer price per Wincanton share of 480 pence from CEVA Logistics UK Rose Limited, a wholly-owned subsidiary of CEVA Logistics S.A., itself a subsidiary of CMA CGM S.A. which was announced on February 26, 2024.

Also, GXO’s offer represents a premium of 104% to the closing price per Wincanton share of 297 pence on January 18, 2024, being the last business day before the commencement of the offer period being the day before the initial CEVA Logistics offer was announced.

The GXO board expects the combination will lead to full annual net run-rate synergies of £45 million ($57.01 million) (pre-tax), based on procurement, and other operational overlap that can be realised by the end of the third year of integration.

The board expects the acquisition to be immediately accretive to earnings per share, excluding synergies, with double-digit accretion expected on a pro forma basis following the realization of synergies.

GXO has garnered irrevocable commitments, totaling 42.39 million Wincanton shares, equating to around 34.0% of issued share capital as of February 29, 2024. 

These commitments are subject to termination under specific conditions, including the emergence of a competing offer exceeding 695 pence per Wincanton share.

“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,” Malcolm Wilson, Chief Executive Officer of GXO, said.

Price Action: GXO shares closed lower by 2.02% to $51.30 on Wednesday. 

Photo via Wikimedia Commons