French container ship company CMA CGM announced a public tender offer for all publicly held registered shares of Swiss freight company CEVA Logistics, with an offer price of CHF 30 per share.
CMA CGM’s public tender will offer other shareholders 30 Swiss francs ($29.75) per share, valuing CEVA at 1.67 billion francs, a price agreed after Ceva rejected a takeover bid in October from Danish freight firm DSV.
Post settlement of the offer, CEVA expects to acquire CMA CGM Logistics from CMA CGM. It is CEVA’s and CMA CGM’s objective to maintain the CEVA share listing on the SIX Swiss Exchange with a significant free float, with governance principles in line with best practices for Swiss listed companies. The entire Public Tender Offer process is expected to close in Mid -April 2019.
The key financial highlights of the business plan are the ones disclosed in the announcement of the Public Tender Offer on 26 November 2018:
- CEVA’s 2021 revenue target above US$9bn, reflecting a 5% average annual organic growth as well as including the contribution of CMA CGM Logistics of US$630 million
- Stronger footprint in Ocean Freight Management
- Expectations on Adjusted EBITDA raised from US$380 million in 2017 to US$470-490 million in 2021
- Intensified business relationship with CMA CGM while keeping an arm’s length relationship.
The strategic partnership between CMA CGM and CEVA is aimed to pioneer the development of integrated logistics solutions, while retaining an arm’s length business relationship between the partners, the company noted. CMA CGM plans to keep CEVA as an independently listed company with a significant free float on SIX Swiss Exchange.
If CMA CGM holds more than 50% of the voting rights or issued share capital of CEVA, this triggers a “change of control” under the agreements governing a significant portion of CEVA’s debt. As a consequence, CEVA is actively working on new financing solutions, most of which are well advanced.
CEVA agreed on 31 December 2018, subject to the settlement of the Offer and receipt of necessary regulatory approvals sought in connection with the Offer, to acquire CMA CGM’s freight management activities for a total consideration (cash free/debt free) of US$105 million, with 100% of the consideration being paid in cash in February 2020. Closing of the CMA CGM Logistics transaction is expected to be completed in the second quarter of 2019.
Rodolphe Saadé, Chairman and CEO of CMA CGM, has made logistics a major focus of his development strategy, since he took the helm of the group in 2017.