October 11, 2018 / 6:21 AM / 2 months ago

Ceva Logistics rejects Danish bidder DSV's $1.55 billion approach

ZURICH (Reuters) - Swiss transport group Ceva Logistics (CEVAL.S) rejected an unsolicited takeover approach from Denmark’s DSV (DSV.CO), saying on Thursday the 1.53 billion Swiss franc ($1.55 billion) cash bid undervalued the company that went public only in May.

FILE PHOTO: A general view of Denmark’s DSV warehouse in Copenhagen, Denmark, October 3, 2016. REUTERS/Jacob Gronholt-Pedersen/File Photo

Danish freight forwarder DSV offered 27.75 francs per share for Ceva in cash, a 50 percent premium to the previous close of 18.42 francs, saying it was confident a combination was in the best interests of both companies “by extending our service offering and giving our combined operations additional scale.”

The offer price was only slightly above the 27.5 francs at which Ceva made its stock market debut.

Ceva shares surged as much as 41 percent to 26.00 francs and were up 36 percent at 25.00 francs by 1322 GMT.

“The board of directors of Ceva Logistics carefully reviewed the proposal with the support of its legal and financial advisors and unanimously concluded that the proposal is not in the best interest of the company and its shareholders,” it said.

“Specifically, the board of directors concluded that the proposal significantly undervalues Ceva’s prospects as a standalone company.”

A Ceva spokesman declined to name the potential buyer but DSV later said it had made a private approach to Ceva’s board.

“DSV has long respected and followed Ceva’s business and believes combining the two companies would deliver significant value to all stakeholders,” DSV said.

DSV, which is ready to make acquisitions again after its $1.35 billion purchase of California-based UTi, declined to comment on whether it would return with a larger offer for Ceva.

Ceva’s biggest shareholder, French shipping group CMA CGM with a stake of just under 25 percent, said it supported Ceva’s decision not to engage in the unsolicited offer.

Ceva said the French group could raise its voting stake to up to a third from the current limit just below 25 percent.

Bank Vontobel analyst Michael Foeth said he thought CMA CGM would rapidly increase its stake to 33.3 percent, while shareholders could also demand an extraordinary general meeting to discuss the matter.

“The board of Ceva will have to convince all shareholders of its ability to fully unlock value exceeding the offer price within a reasonable time frame,” he said.

A CMA CGM spokeswoman said the company would consider raising its shareholding in Ceva, but did not plan to launch a takeover offer for the entire company, where it already has two of the eight board seats.

At 33.3 percent of the voting rights, the Marseille-based company would have to launch a takeover offer for the whole business under Swiss regulations.

“...There is a lot of potential to be unlocked in this company, and they feel it is important Ceva has the stability to achieve its goals,” a CMA CGM spokeswoman said.

($1 = 0.9865 Swiss francs)

Editing by Michael Shields and David Evans

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