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            october 18, 2019

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DSV fails to acquire CEVA for US$1.54b


Denmark's DSV has made an unsuccessful bid to acquire CEVA Logistics for about US$1.54 billion.
The bid was rejected by CEVA's board of directors and the company said the offer was inadequate and that it preferred to explore measures to enhance performance with the French container carrier CMA CGM, which owns a quarter of CEVA.
CMA CGM said it is "considering an increase in its shareholding of CEVA with a view to providing the company with the required stability to achieve its transformation."
Based in Baar, Switzerland, CEVA said its board of directors "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."
Though DSV said its offer of CHF27.75 (US$27.98) per share would have provided CEVA shareholders "with an attractive premium of 50.7 per cent to CEVA share price as of October 10 and 37 per cent to the 60-day volume weighted average price as of October 10," CEVA said its board "concluded that the proposal significantly undervalues CEVA's prospects as a standalone company."
In terms of gross revenue in 2017, the consulting firm Armstrong & Associates ranked DSV as the world's 6th largest third-party logistics provider ($11.37 billion) and CEVA Logistics as the 10th largest ($6.99 billion), reports American Shipper.
CEVA said that with CMA GGM as a strategic partner, it "has been exploring measures to enhance performance in order to unlock CEVA Logistics' full potential."
As a result CEVA said DSV's "unsolicited proposal is therefore inadequate" and that it has "decided to not engage on the basis of this unsolicited proposal."
CEVA said at the request of CMA CGM its board agreed to modify a stand-still agreement that would allow CMA CGM to increase its holdings in CEVA up to one third of voting shares.
Reuters reported that "at 33.3 per cent of the voting rights, the Marseille-based company would have to launch a takeover offer for the whole business under Swiss regulations".
As the fourth-largest container carrier (after Maersk, MSC and COSCO-OOCL), CMA CGM said it will "generate new commercial opportunities for CEVA, particularly through its long-standing relationships with customers looking for more integrated end-to-end offers".

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