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The board of British logistics giant Wincanton has recommended shareholders accept the new offer £764m from GXO after the US business gazumped French rival Ceva.
The US company gatecrashed Ceva’s proposed deal to buy Wincanton, which counts a number of major UK supermarkets as its customers, on Thursday with an offer that would see investors receive 605p a share.
Wincanton told the market this morning that it was “pleased that the public offer process… is maximising value and delivering a significant premium to Wincanton shareholders”.
“Accordingly, the Wincanton directors intend to recommend unanimously the GXO offer and, accordingly, have withdrawn their recommendation of the increased and final cash offer by Ceva Logistics.”
This GXO offer surpassed Ceva’s latest bid of 480p a share. The French business had already upped its previous offer for London-listed Wincanton of 450p a share – or by £38m to £605m – earlier in the week in response to reports of a possible rival bidder.
The GXO offer price represents a premium of approximately 104% to the closing price of 297 pence per Wincanton Share on 18 January 2024 before the bidding war started.
Wincanton chairman Martin Read said: “We have long been clear that Wincanton is a great business with a compelling strategy, strong customer relationships and excellent people. Under the current management team, we have made positive progress and ensured that Wincanton is at the forefront of logistics innovation.
“The board of Wincanton is pleased that GXO recognises the very significant value inherent in this business and intends to recommend the offer to shareholders for their consideration.”
News of the new offer sent Wincanton shares up 22.6% yesterday to 624p.
Morning update
The rain in February has dampened UK retail football, according to the latest BRC-Sensormatic IQ Footfall Monitor.
Total UK footfall decreased by 6.2% in the four weeks from 28 January.
This is a far steeper drop than the 2.8% decline seen in January.
High street footfall slumped by 9.3% in February year on year, compared with a 2.3% drop in January.
Retail park footfall was down 5.8% from 1.8% in January, while shopping centre footfall fell 7% compared with a 5% decline in the first month of the year.
All UK nations saw a fall in footfall year on year. Scotland saw the smallest year-on-year drop in footfall at 3.2%. England was down 6.6%, Northern Ireland 7.1% and Wales 8%.
BRC CEO Helen Dickinson said: “Footfall experienced its biggest fall since the pandemic. One of the wettest Februarys on record, exacerbated by train strikes at the start of the month, meant shoppers visited fewer stores, with high streets most affected. London, where footfall had been outperforming other major cities in the UK, saw one of the most significant declines.
“With these figures showing the UK underperforming compared to other developed markets, it’s time the government took action to drive tourist footfall and spending across the UK. Since the end of VAT-free shopping for tourists in 2021, the UK has been at a competitive disadvantage compared to its European counterparts. With footfall in major hubs trending downwards in recent months, the Chancellor must reinstate VAT-free shopping in his budget to support businesses and jobs across the UK.”
Andy Sumpter, retail consultant EMEA for Sensormatic Solutions, added: “February saw a collision course of disruptive forces negatively impacting store traffic, meaning store visits dipped to their lowest ebb since the pandemic. Prior to any energy price cap reduction, and with squeezed spending budgets, the confirmation of the UK’s ‘technical recession’ in 2023 appears to have weakened consumer confidence.
“The wettest February on record probably didn’t help, and even Valentine’s Day, which usually provides a frisson of footfall, failed to woo shoppers into store. With the Bank of England signalling the UK’s economy may already be recovering from what it describes as a mild recession, retailers will be hoping signs of an upturn will translate into store traffic and spend, with many looking towards the prospect of an early Easter in March to bring about a change of fortunes.”
On the markets this morning, the FTSE 100 is up 0.5% to 7,665.7pts.
Early risers include Glanbia, up 1.5% to €17.06, Reckitt Benckiser, up 1.5% to 5,072p and C&C Group, up 1.3% to 145.2p.
Fallers include Greencore Group, down 2.2% to 100p, Ocado, down 1.9% to 501.5p and Hilton Food Group, down 1.5% to 786p.
Yesterday in the City
The FSTE 100 edged up 0.1% yesterday to 7,630pts.
In grocery the big news was the annual results from Ocado, which sent its shares up 4.2% to 511.4p as it posted growth across its divisions and a return to adjusted profit.
Other risers included Naked Wines, up 9.8% to 67p, Haleon, up 5.6% to 331.5p after its own annual results, Just Eat Takeaway.com, up 4.1% to 511.4p, McBride, up 2.3% to 90p and Nichols, up 1.4% to 996p.
The day’s fallers included WH Smith, down 2.4% to 1,236p, Domino’s Pizza Group, down 1.6% to 337p, Marks & Spencer, down 1.6% to 236.8p, Deliveroo, down 1.6% to 109.8p and Sainsbury’s, down 1.6% to 249.6p.
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