CEVA board decides not to recommend CMA CGM takeover bid of CHF30 per share

CEVA Logistics’s board had decided not to recommend the CHF30 per share takeover offer by shipping line CMA CGM, a 33% major shareholder.
Switzerland-based CEVA said in a statement that its board of directors, “with the exception of two conflicted members, came unanimously to the conclusion not to recommend to CEVA’s shareholders to tender their shares into the offer”.
It added: “The valuation of the revised business plan indicates a midpoint value of CHF40 per share, well above the share price of CHF30 offered by CMA CGM.”
The CHF30 per share offer by Marseilles-based CMA CGM values CEVA at around $1.6bn.
CMA CGM announced a public tender offer for all publicly held registered shares of CEVA Logistics in November last year.
That bid came after CMA CGM, in October 2018, raised its stake in CEVA Logistics from 24.99% to 33% following the failed takeover approach for CEVA by Danish logistics giant DSV.
DSV, which is now in the throes of an unsolicited bid for Swiss logistics giant Panalpina, had originally offered CHF27.75 per share for CEVA, but then raised the offer CHF30.
In its statement today the CEVA board added that the CMA CGM offer price of CHF30 is “reasonable from a financial perspective and that the offer provides a fair exit opportunity for shareholders who wish to receive cash for their CEVA shares”.
But, added the statement, the CEVA board “makes its recommendation in the belief that shareholders could realize a higher value with their continuing investment”.
The statement cites: “The growth potential inherent in the CEVA business, the effects of the acquisition of the freight management business of CMA CGM the strategic partnership between CEVA and CMA CGM.”
In late November last year, CEVA announced that it will buy CMA CGM’s freight management activities for $105m as part of a wider revision of its strategic plan that will see management at the shipping line take key positions within the forwarder.
CEVA, which launched a transformation project in 2014, said then that as well as the acquisition of CMA CGM Log, it would launch a new strategic partnership with CMA CGM and accelerate turnaround efforts with the support of CMA CGM.
In its statement today CEVA board said that the company’s key financial highlights of the business plan remain the ones disclosed in the announcement of the public tender offer on November 26.
These highlights include a 2021 revenue target above $9bn, “reflecting a 5% average annual organic growth as well as including the contribution of CMA CGM Logistics of $630m”.
The November public tender offer also spoke of a “stronger footprint in ocean freight management, expectations on adjusted EBITDA raised from $380m in 2017 to $470m-$490m in 2021, and a intensified business relationship with CMA CGM while keeping an arm’s length relationship”.