DSV move for Panalpina could spark ‘bidding war’ for forwarder

Consultant Transport Intelligence (Ti) has suggested that DSV’s move to purchase Panalpina could spark a ‘bidding war’ for the forwarder that could price the Danish company out of the running.
In its latest market round-up, Ti took a closer look at the potential outcome of DSV’s $4bn offer to purchase Panalpina.
Practice leader Thomas Cullen pointed to rumours that other companies were also interested in buying Panalpina, in particular Kuehne+Nagel.
He said: "The price offered by DSV is the equivalent of $4.1bn and there are suggestions that this is not very generous to Panalpina shareholders, thus tempting other potential buyers and triggering a ‘bidding war’.
"DSV is a highly profitable company with strong credit lines however it also has a record of avoiding overpaying for its purchases. It may simply be elbowed out of the way by more extravagant rivals."
Cullen also questioned whether Panalpina shareholders would be interested in selling their stake in the company.
The company’s majority shareholder, the Ernst Goehner Foundation with a 40% stake, has "stubbornly disagreed" with any takeover offers in the past, Cullen writes.
However, this may have changed following criticism from the number two shareholder, Cevian Capital with a 12% stake, over Panalpina chairman Peter Ulber’s rejection of takeover offers.
Ulber recently announced he would not stand for re-election as chief executive citing a conflict of interests – he is chairman of Panalpina and is also on the board of the Ernst Goehner Foundation.
"[the Ernst Goehner Foundation] has never been attracted to the prospect of selling the company," said Cullen.
"Perhaps the new offer has been motivated by DSV’s perception that this has now changed and the ferocious criticism of the Foundation and Panalpina’s management by other shareholders has changed minds."
According to the UK’s Financial Times, Cevian Capital typically looks to sell out after 5-10 years of investment. It first bought a stake in Panalpina nine years ago.
He concluded: "If DSV succeeds in an acquisition of Panalpina it will continue the company’s transformation.
"Buying UTi a couple of years ago gave the company a presence in a string of emerging markets as well as the US, but Panalpina will not only catapult DSV into being one of the leading freight forwarders in the world but will also reduce its exposure to the European market to around 60% of sales."
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