CMA CGM is set to gain 100% ownership of Ceva Logistics in the coming months after the French container shipping group successfully increased its control of the third-party logistics (3PL) partner to more than 89% in the first phase of the tender offer, which ended last week.
Ceva’s board this morning announced that it is recommending that the company’s remaining shareholders tender their shares during an additional two-week offer period beginning tomorrow and continuing until 2 April, with CMA CMG otherwise expected to implement a ‘squeeze-out’ in which it would apply for a delisting of CEVA’s shares from the SIX Swiss Exchange.
Ceva today formally announced the interim results of the public tender offer, confirming the provisional results that Lloyd’s Loading List reported last week that CMA CGM to now effectively controls 89.47% of the share capital and voting rights of Ceva. CMA CGM’s public tender offer of CHF30 per share, which values Ceva at around US$1.66 billion, was agreed after Ceva rejected a takeover bid in October from Danish freight forwarding and logistics competitor DSV.
CMA CGM built up a 33% stake in Ceva late last year following the logistics operator’s initial public offering (IPO) on the Swiss stock exchange last year, initially acquiring 24.99% and then bolstering this to 33% and deepening its strategic partnership with Ceva in an effort to fend off the takeover attempt by DSV. Since then, CMA CGM has also acquired a financial interest in a further 17.6% of Ceva’s shares through forward agreements with Société Générale and Goldman Sachs that will convert to shareholdings in June, effectively giving CMA CGM a controlling stake in Ceva of 50.56% even prior to the public tender offer in February and March.
That tender offer saw more than three quarters (78.69%) of Ceva’s remaining shareholders tender their shares to CMA CGM under its CHF30 per share offer, equivalent to 38.9% of Ceva’s shares.
Ceva said final settlement of the tender offer is expected to occur on 16 April, noting: “Ceva acknowledges that CMA CGM is likely to hold, after settlement of the offer, a percentage of the share capital and voting rights of Ceva that would allow CMA CGM to implement a squeeze-out. Ceva would therefore apply for a delisting of its shares from the SIX Swiss Exchange.”
In addition, it is expected that members of the company’s executive board will tender their shares into the offer and that shares held by Ceva’s board of directors will be unblocked, so that members of the board of directors may tender their shares into the offer.
“Consequently, Ceva’s board of directors has decided to recommend that remaining shareholders tender their shares during the upcoming additional offer period, which will commence on 20 March 2019 and close on 2 April 2019,” Ceva said.
“As described in the offer prospectus, CMA CGM reserves the right to cause Ceva to apply for the delisting of Ceva’s shares with the SIX Swiss Exchange and request the cancellation of non-tendered Ceva shares or implement a squeeze-out merger. If delisting occurs, it would most likely occur concurrently with a squeeze-out, which would be expected to take place in the third quarter of 2019 once all stock exchange and other legal conditions are fulfilled.”
Ceva said it is also expected that Ceva’s board of directors will propose that Rodolphe Saadé, chairman and CEO of CMA CGM, be elected as chairman of the Ceva board of directors in the upcoming Annual General Meeting (AGM) on April 29, with Rolf Watter acting as vice-chairman following the AGM. It is further expected that CMA CGM will retain three independent members of the board of directors of Ceva for the time being.
Ceva Logistics is a global third-party logistics company that designs and operates supply-chain solutions for large and medium-size national and multinational companies. Its integrated network in Freight Management and Contract Logistics spans more than 160 countries. Ceva generated revenue of US$7.4 billion and adjusted EBITDA of US$260 million in 2018.