8-K: GXO Logistics Switches Acquisition of Wincanton to Scheme of Arrangement, CMA CGM Offer Adjourned

GXO Logistics will now pursue its acquisition of Wincanton through a scheme of arrangement, abandoning the previous takeover offer, while the competing CMA CGM offer is indefinitely adjourned.

Summary

• GXO Logistics has changed its approach to acquiring Wincanton from a takeover offer to a scheme of arrangement, with the consent of Wincanton and the UK Panel on Takeovers and Mergers.
• This change follows GXO's increased offer of 605 pence per Wincanton share, which led Wincanton's board to withdraw its recommendation of the competing 480 pence per share offer from CMA CGM.
• CMA CGM has stated it will not increase its offer and intends to let its offer lapse, leading to the indefinite adjournment of CMA CGM's shareholder meetings.
• The scheme of arrangement requires approval from a majority of Wincanton shareholders, representing 75% in value, at a court meeting and a general meeting.
• The scheme is expected to become effective in mid-Q2 2024, and a scheme document with full details will be sent to Wincanton shareholders by March 28, 2024.
• Irrevocable undertakings from shareholders representing approximately 34% of Wincanton's issued share capital remain valid for the scheme.
• Following the scheme's effectiveness, Wincanton shares will be delisted from the London Stock Exchange and the company will be re-registered as a private limited company.

Sentiment

Score: 7

Explanation: The document indicates a positive outcome for GXO with the switch to a scheme of arrangement and the withdrawal of the competing offer. However, there are still risks associated with shareholder and court approvals, which tempers the overall sentiment.

Positives

• GXO's higher offer of 605 pence per share was accepted by the Wincanton board.
• The switch to a scheme of arrangement is supported by Wincanton and the UK Panel on Takeovers and Mergers.
• The competing CMA CGM offer is effectively withdrawn, clearing the path for GXO's acquisition.
• GXO has secured significant shareholder support with irrevocable undertakings representing 34% of Wincanton's share capital.
• The scheme is expected to be completed in mid-Q2 2024, providing a clear timeline for the acquisition.

Negatives

• The change in acquisition method from a takeover offer to a scheme of arrangement introduces additional steps and approvals.
• Wincanton shareholders will need to vote on the scheme at both a court meeting and a general meeting.
• The delisting of Wincanton shares from the London Stock Exchange will impact shareholders who prefer to trade on the public market.
• The indefinite adjournment of the CMA CGM offer shareholder meetings may cause uncertainty for some Wincanton shareholders.

Risks

• The scheme of arrangement is conditional on shareholder approval and court sanction, which could introduce delays or prevent the acquisition.
• There is a risk that the scheme document may not be posted to shareholders by the expected date of March 28, 2024.
• The integration of Wincanton into GXO may present challenges and may not achieve the anticipated benefits.
• The delisting of Wincanton shares and re-registration as a private company may have unforeseen consequences.

Future Outlook

The scheme of arrangement is expected to become effective in mid-Q2 2024, subject to shareholder and court approvals. Wincanton will be delisted from the London Stock Exchange and re-registered as a private company after the scheme is effective.

Management Comments

• The GXO Directors welcome the Wincanton Directors intention to recommend the GXO Offer and to support GXO to implement the Acquisition by way of a Scheme.
• Wincanton intends to adjourn the Meetings in order to allow the GXO Offer to proceed.

Industry Context

This announcement reflects the competitive nature of the logistics industry, with GXO and CMA CGM vying for control of Wincanton. The switch to a scheme of arrangement is a strategic move by GXO to secure the acquisition, while the withdrawal of the CMA CGM offer highlights the importance of offering a compelling price to shareholders.

Comparison to Industry Standards

• The acquisition of Wincanton by GXO is a significant move in the logistics sector, similar to other large-scale acquisitions such as the acquisition of Norbert Dentressangle by XPO Logistics in 2015.
• The use of a scheme of arrangement is a common method for acquisitions of UK-listed companies, comparable to the acquisition of Logica by CGI in 2012.
• The bidding war between GXO and CMA CGM is reminiscent of other competitive acquisition scenarios in the logistics industry, such as the battle for control of CEVA Logistics in 2018.
• The 605 pence per share offer from GXO represents a premium over the previous CMA CGM offer, which is a typical strategy in competitive acquisition situations.

Stakeholder Impact

• Wincanton shareholders will receive 605 pence per share in cash if the scheme is approved.
• Wincanton employees may experience changes as the company integrates with GXO.
• Wincanton customers and suppliers may see changes in their relationships with the company.
• GXO shareholders will see the company expand its operations and market share.

Next Steps

• Wincanton will post a scheme document to shareholders by March 28, 2024.
• Wincanton shareholders will vote on the scheme at a court meeting and a general meeting.
• The scheme will be submitted for court sanction.
• Wincanton shares will be delisted from the London Stock Exchange.
• Wincanton will be re-registered as a private limited company.

Key Dates

Keywords

acquisition, scheme of arrangement, takeover offer, GXO Logistics, Wincanton, CMA CGM, shareholders, delisting, merger, logistics