CVC offers to increase bid for DB Schenker

The private equity consortium led by CVC has reportedly launched a last-ditch effort to beat DSV in the race to buy DB Schenker despite the Danish forwarder having signed a €14.3bn take over deal last week.

News agencies Reuters and Bloomberg are both reporting that CVC has written to Schenker parent company Deutsche Bahn to explain why its existing offer is economically advantageous compared with the DSV bid.

Reuters says CVC would also be prepared to discuss an increase in the equity value of its offer in order to address any concerns.

CVC added that it would welcome a process based on equal treatment and transparency.

In response, a Deutsche Bahn spokesperson said that an independent auditor had assessed the bids and that DSV’s offer was still the most advantageous.

“The result is clear: The successful bid in the sales process was the best in economic terms from all aspects and in line with clearly communicated tender parameters,” the spokesperson said.

“With the signing of the purchase agreement with DSV, the sales process is concluded in accordance with EU state aid law and unilateral declarations by the bidders can no longer be considered.

“However, even assuming that all modifications submitted by CVC after the final bid are considered, DSV’s offer remains economically advantageous.”

The spokesperson added: “According to the parameters of EU law, the economic attractiveness of the offer is crucial. All binding bids received were thoroughly examined and evaluated by Deutsche Bahn and its consultants within the framework of the procedural and legal requirements and discussed in relevant committees.”

DSV’s bid for the forwarder has an enterprise value of €14.3bn and an equity value of €11.3bn, according to ratings agency Moody’s.

The deal was announced last Friday but is conditional on approvals by the Supervisory Board of Deutsche Bahn and by the German Federal Ministry for Digital and Transport.

The supervisory board is reportedly due to meet on September 27.

One of the major discussion points around the two offers for the logistics firm has been the potential for job losses.

Leading German trade union Ver.di had given its backing to the CVC-led private equity consortium bid to take over DB Schenker over fears of job losses should DSV be successful.

Research from the union has indicated that more jobs would be lost at the forwarder because the company would be split into three entities. Ver.di reckoned more than 5,000 extra jobs would be lost if the Danish forwarder is successful.

However, the Danish forwarder looked to allay those fears in its final offer for the company.

DSV said it would invest €1bn in the firm’s German operations over the next three to five years and various central functions will stay in the country, including at the current headquarters in Essen. 

DSV also issued social undertakings for German employees in Schenker, which apply until two years after closing. Collective agreements and individual employment conditions for German employees on the closing date will “generally be retained” in the two-year period.

“The investments will contribute to long-term growth and job creation, as well as promoting modern and attractive workplaces. It is anticipated that five years from now, the combined organisation will have more employees in Germany than Schenker and DSV have today,” DSV said.

DSV signs deal to takeover DB Schenker and create world’s largest forwarder