Wincanton to go private – with board fed up with share price underperformance
Wincanton, the logistics and warehouse outfit, is the latest firm to leave the London public market and head for private hands.
This morning the firm announced it had agreed terms with CEVA Logistics, the French giant, in a £556m deal.
The price represents a 52 per cent premium to yesterday’s closing price, well above the once set-in-stone thirty per cent premium firms would expect to receive in take-privates.
The deal was confirmed in a statement to markets this morning.
CEVA said the deal would allow it to up its offering on contract logistics in the UK and Ireland.
The strong performance of the company has not been reflected in the performance of its shares in recent years
Chairman Sir Martin Read
The London Stock Exchange has been raided over the past 18 months, mostly by private equity, with valuations in London lower on a price to earnings ratio than competitors listed on other global exchanges.
Wincanton has benefited from the uptick in online retail in recent years, with the board this morning saying there were strong “structural drivers” underpinning future growth.
Though the board was “highly confident in the long-term prospects of the business as an independent listed company,” the “attraction” of the CEVA deal proved too much.
Wincanton received a number of unsolicited bids which did not meet their valuation, until the latest offer.
Interestingly. the board also said that a lack of sufficient liquidity of Wincanton shares on the London Stock Exchange was also a factor, as was the fact that ” Wincanton’s consistently strong trading performance has not, in the view of the Wincanton Board, been fully reflected in the price of Wincanton Shares for a material period of time.”
Sir Martin Read, Wincanton’s chairman, said: “While we remain confident in the long-term prospects of Wincanton and the wider sector, we recognise that the strong performance of the company has not been reflected in the performance of its shares in recent years. We therefore believe this offer represents the best opportunity for shareholders to realise the value of their investment with greater certainty.”