Tibbett & Britten chiefs share £5m takeover windfall

The directors of the haulage and logistics company Tibbett & Britten stand to share in a pay-off worth up to £5m, following the takeover of the business yesterday by its UK rival Exel.

The directors of the haulage and logistics company Tibbett & Britten stand to share in a pay-off worth up to £5m, following the takeover of the business yesterday by its UK rival Exel.

Exel has agreed to pay £328m for Tibbett & Britten in a deal that reinforces its position as the world's biggest logistics and distribution company.

The 668p-a-share offer represents a 36 premium to the Tibbett & Britten share price the day before it disclosed it had received a takeover approach and was viewed by City analysts as a very full price to pay.

Exel's four executive directors, led by its chairman John Harvey and chief executive Michael Arrowsmith, have service contracts that entitle them to two years' pay in the event of the company being taken over. This will net them £2m. They could gain a further £3m through shares conditionally awarded under Tibbett & Britten's long-term incentive plan.

Details of the awards being granted to each director will appear in the formal offer document to shareholders, expected to be sent out next week.

John Allan, the chief executive of Exel, said the takeover would lead to only 100-or-so job losses, mostly at head office level, even though the enlarged company will have a workforce of 119,000 spread across 120 countries and a turnover of £6.7bn.

Exel said cost savings would be in the order of £15m-£20m a year, adding that the deal would increase earnings per share in the first full year of ownership.

This is the second big deal pulled off by Mr Allan, who oversaw the 1999 merger of Ocean and National Freight Corporation to create Exel. Tibbett & Britten was also a takeover target at that time but discussions came to nothing.

Exel approached Tibbett & Britten again in April this year but was rebuffed. It clinched the deal last Sunday night by agreeing to raise its offer.

Mr Allan said the takeover would strengthen Exel in central and eastern Europe in particular, adding that he foresaw no problems with competition authorities because of the fragmented nature of the logistics industry.