GXO Logistics has announced that it has made a cash offer to acquire Wincanton plc (Wincanton) under Part 28 of the U.K. Companies Act 2006 (the Acquisition). Under the terms of the offer, each Wincanton shareholder will be entitled to receive 605 pence in cash for each Wincanton share held.
GXO has received irrevocable undertakings to accept (or to procure the acceptance of) the offer in respect of, in aggregate, 42,395,691 Wincanton shares and representing approximately 34.0% of the issued share capital of Wincanton as at 29 February 2024. The irrevocable undertakings will cease to be binding in certain situations, including where a third party announces a competing offer where the value of the consideration is more than 695 pence per Wincanton share.
The announcement has been issued by GXO through the UK’s Regulatory News Service (RNS) under Rule 2.7 of the UK Takeover Code. The Acquisition remains subject to satisfaction of the conditions set out in the announcement, including regulatory clearances.
Malcolm Wilson, Chief Executive Officer 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.”
Strategic Rationale
The GXO Board believes the combination with Wincanton would advance GXO’s position as a global pure-play contract logistics leader and create significant value for all stakeholders in several respects:
Expands GXO’s presence in key strategic growth verticals
- The combination will expand GXO’s offering and customer base in a number of growth verticals in the UK, providing GXO with a springboard to offer industrial services across Europe.
- GXO has a market-leading service platform for aerospace and defence in the U.S., and the combined company will enhance service for UK customers in that vertical by leveraging GXO’s capabilities and expertise.
Materially enhances service offering for UK and Ireland customers across a broader range of sectors and geographies
- This complementary combination will allow new and existing customers to benefit from a broader range of services and capabilities and an expanded global platform.
- Wincanton customers will have the opportunity to seamlessly globalize their supply chain operations across the 27 countries where GXO operates.
Improves operations for UK and Ireland customers through advanced technology
- GXO prides itself on its technology and automation, and this combination will allow Wincanton customers to enhance the efficiency and resilience of their fulfilment operations through advanced tech deployment.
Financial Rationale
The transaction is expected to create significant value for shareholders:
Provide additional growth opportunities
- The complementary service offerings, customer portfolios and footprints will provide additional growth opportunities.
Highly synergistic
- The complementary infrastructure and offerings will enable GXO to manage the combined company more efficiently, resulting in greater productivity and lower costs for the benefit of customers.
- The GXO board expects the combination will lead to full annual net run-rate synergies of £45m (pre-tax), based on procurement, and other operational overlap that can be realised by the end of the third year of integration; and
- As a result, the GXO 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.
Transaction Terms
The Acquisition provides Wincanton shareholders with a superior value to the CEVA Logistics final offer. The Acquisition 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. (CEVA Logistics) which was announced on 26 February 2024;
- 104% to the closing price per Wincanton share of 297 pence on 18 January 2024, being the last business day before the commencement of the offer period being the day before the initial CEVA Logistics offer was announced.
