- Shares gain on all-cash 450p per share offer
- Bid price equivalent to 52% premium
- Top five shareholders own a third of the company
Logistics firm Wincanton (WIN) was one of the biggest gainers in London on Friday, surging almost 50% to 438p after receiving an all-cash offer worth 450p per share from a unit of French shipping giant CMA CGM.
Directors are unanimously recommending the offer, which values Wincanton’s equity at approximately £566.9 million and is equivalent to a total enterprise value of £764.9 million.
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The offer price represents a premium of 52% over the prior closing price and is 82% above the volume weighted average price over the last 12-months. Wincanton shares reached an all-time high of 454p in May 2021.
Since floating on the stock market in 2001 the shares have been relatively disappointing, gaining roughly 50% over the twenty-three-year period, equivalent to around 2% a year.
WHY IS THE COMPANY SELLING OUT?
Wincanton revealed it had received and rejected several unsolicited proposals from the bidder over a period of weeks before recommending the 450p offer.
The board noted that the ‘limited’ liquidity of the shares presents a ‘challenge’ for shareholders to monetise their holdings.
It also vented some frustration that ‘consistently strong trading’ has not been reflected in the share price performance for a ‘material’ period.
CMA CGA is controlled by the billionaire Saade family and is a global player in sea, land, and air logistics serving more than 420 ports across five continents.
Russ Mould, investment director at AJ Bell commented: ‘The UK takeover machine whirred back into action after CEVA said it would pay 52% above last night’s closing price to buy logistics group Wincanton.
‘A successful bid would end Wincanton’s 23 years on the UK stock market, during which it has battled difficult periods plagued by high levels of debt and several profit warnings but still managed to come out the other end intact.’
BIG PAY DAY FOR FUNDS AND TRUSTS
Top Wincanton shareholders that stand to benefit from the takeover include Columbia Threadneedle Equity Income (FUND:B888FR3) which owns 12.7%, Aberforth Smaller Companies Trust (ASL) with a 9.6% stake and Polar Capital UK Value Opportunities (FUND:BD81XX9), which owns 2.9% of the company.
The top five shareholders own roughly a third of Wincanton's shares and how they vote will be instrumental in the deal getting across the line.
The board said it has received letters of intent to vote in favour of the deal from shareholders in respect of 8.7 million shares, representing just under 7% of the issued share capital.
The fact the shares are trading within 3% of the offer price suggests the company will garner the required support to vote the deal through.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor of the article (James Crux) own shares in AJ Bell.
