Christian Salvesen rejects revised Custos bid

Click to follow
The Independent Online

Christian Salvesen, the distribution and logistics company, yesterday said it had rejected a revised £530m takeover offer from AB Custos, a Swedish investment company which is the group's largest shareholder.

Christian Salvesen, the distribution and logistics company, yesterday said it had rejected a revised £530m takeover offer from AB Custos, a Swedish investment company which is the group's largest shareholder.

The 200p-a-share approach was the second made by Custos and is believed to have been backed by Doughty Hanson & Co, Europe's biggest venture capital firm. In June, Salvesen dismissed an indicative cash offer of 180p-a-share. Shares in Salvesen jumped 17 per cent to 209p in morning trading on hopes that the rebuttal would attract a higher offer. But they later fell back to end 1p below Wednesday's closing price at 177.5p after Custos made it clear that it was now walking away from the deal.

Christer Gardell, Custos's chief executive, said: "We said that we would seek a recommendation from the [Salvesen] board to proceed with our offer and the board did not want to enter a dialogue with us. So that's the conclusion." Custos had hoped to work with the Salvesen management to help it create a "pan-European logistics business". The Swedish firm reserves the right to review its position if the Salvesen board subsequently decides to recommend the offer or if an alternative approach is made by a third party.

Mr Gardell said the fresh offer represented a premium of 65 per cent to the UK group's closing share price of 121.5p on 30 May - the day the original approach was announced. He added: "Given the long history of poor performance of Christian Salvesen's shares in 'non-bid' periods, this decision is hard to understand. Custos, as the largest shareholder, now looks to the [Salvesen] board to deliver better value to its shareholders in the near-term."

A spokesman for Salvesen said: "The board consulted widely with its other major shareholders and the Custos offer was not something that reflects the value they were looking for. There is no way [the company] would have rejected it otherwise."

The UK group stressed that it had received "only outline proposals" from Custos and that these had concerned "a possible offer in the range of 190p to 200p-a-share". Analysts were divided as to whether Salvesen had acted wisely in rejecting the offer. One claimed the company was worth as much as 250p while another said: "If the market is expecting a higher offer, it is in dreamland."

Custos began building up its stake in Salvesen last year and now owns about 10 per cent of the company. Salvesen recently reported full-year figures which showed pre-tax profits of £38.6m, more than double the previous year.

Comments