Board opposes higher shareholder offer – CEVA's shares firmer | 1/28/19


It is the temporary end to a defensive fight: The main shareholder, CMA CGM, has published its public purchase offer for the Swiss logistics group CEVA.

The French shipowner does not want to take over the company completely. Instead, CMA CGM's leadership is concerned that CEVA is not resorting to a hostile takeover bid.

Because the consolidation pressure in the logistics industry is great and CEVA as a mid-sized player in the market is an attractive acquisition target. Thus, the board of directors of the company Baarer received in October last year the Danish Group DSV a public tender, which now changed its ambitions for the competitor Panalpina.

Because at CEVA the offer of DSV found little favor. DSV would have agreed to pay CHF 27.75 per share of CEVA. The logistics group was clearly undervalued by this offer and secured the support of its anchor shareholder, CMA CGM.

Mandatory offer was triggered

The French shipping company subsequently increased its stake in CEVA to 33%. This triggered a mandatory bid by CMA CGM for CEVA. As under Swiss law, by acquiring more than a third of the votes of a listed company, a public takeover bid must be made to all shareholders.

As was already known and reaffirmed in the prospectus of the offer on Monday, the French offer CHF 30 per share of CEVA. With this acquisition offer, the Swiss freight company is valued at 1.66 billion Swiss francs. However, the Board of Directors of CEVA now also considers the offer of CMA CGM very deep.

He recommends that his shareholders – with the exception of two representatives who resigned – reject the offer. The recommendation is based on a comprehensive review of the business plan developed with external consultants for the period up to 2023, CEVA said.

Because the business plan shows, on average, a valuation of 40 francs per share of CEVA. Although the CMA CGM offer is a "fair exit option" for shareholders. Nevertheless, it is convinced that the shareholders "could reach a higher value maintaining their investments".

"Meaningful Floating"

Surprisingly, this recommendation of rejection of the offer by the Board of Directors of CEVA, obviously, is not. After all, CMA CGM does not want to integrate CEVA or withdraw it from the stock market, but only protect it from being taken over by competitors.

As CEVA CEO Xavier Urbain pointed out in an interview with AWP in November, CEVA should remain listed on the Swiss stock exchange, despite the predictable dominance of the French shipping company. Also on Monday CEVA stated this in the Notice to the Offering Prospectus and stated that the objective remains a "significant free float" of CEVA's shares.

Anyone wishing to submit their CEVA papers to CMA CGM can do so from February 12 to March 12, 2019. According to CEVA, the entire process of the public offering is expected to be completed by mid-April 2019.

Investors are well received. In a generally weaker SPI general market, the papers are currently recording a 0.5% increase for CHF 30.

kw / ra

Zurich (awp)


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