British logistics company Wincanton plc (GB:WIN) has agreed to be acquired by French shipping giant CMA CGM in a deal valued at £764.9 million, including debt. The privately-owned CMA CGM has offered an all-cash deal of 450p per share, valuing WIN’s stock at about £567 million and representing a 52% premium to the closing price on January 18. WIN stock jumped 47.3% on the news to touch an all-time high of 440p this morning.
Here’s Why Wincanton is Important for CMA CGM
Wincanton provides supply chain and logistics services to retail, consumer, industrial, defense, and transportation segments. It is a well-known logistics partner for British and Irish brands, delivering a range of products to customers’ doorsteps.
Wincanton’s board has unanimously approved the deal and urged shareholders to vote in favor of the same. WIN’s acquisition will delist its shares from the stock exchange and make it a private unit of CMA CGM.
CMA CGM, which is owned by French billionaire Saadé family, is one of the largest shipping companies in the world. For CMA CGM, acquiring Wincanton opens doors to its logistics ambition and a gateway to the U.K. grocery and retail sector. CMA CGM is set to acquire Wincanton through a specially formed unit, CEVA Logistics UK Rose Ltd. CMA CGM is optimistic about the long-term potential of Wincanton and believes that WIN shares are undervalued, given the company’s solid performance. Hence, CMA CGM believes this offer fully justifies the best opportunity for WIN’s shareholders.
Are Wincanton Shares a Good Buy?
For the six months ending September 30, 2023, all of Wincanton’s key financial metrics declined compared to the prior-year period. Even so, WIN maintained its dividend payment of 4.4p per share and initiated a share buyback program aided by solid cash generation.
Talking about its outlook, Wincanton did mention that consistent macro pressures are expected to continue impacting its performance in the near term. However, strong cash flows will help it remain on track to achieve its strategic ambitions. Excluding the share price gain from this morning, WIN stock had lost 2.4% in the past year.
