25th Nov 2019 18:05
(Alliance News) - Eddie Stobart Logistics PLC said Monday it is "disappointed" with Wincanton PLC's decision to not make an offer for the company, "despite being granted access to extensive due diligence" since mid-September.
Eddie Stobart said it actively encouraged Wincanton to put forward a proposal.
"However, at no stage of their involvement in the process was any offer forthcoming, nor any indication as to the terms of any offer should one be forthcoming," Eddie Stobart said.
Earlier on Monday Wincanton said it has decided not to make an offer for Eddie Stobart Logistics, citing financial concerns and ongoing liquidity of the company.
Wincanton said the recent disclosures by Eddie Stobart have confirmed a material reduction in earnings before tax, poor cash collection and higher net debt.
"Even with the incremental synergies which would be available to a trade buyer such as Wincanton, the board cannot see how concerns with regards to Eddie Stobart's financial performance and ongoing liquidity can be sufficiently overcome to enhance Wincanton's shareholder value through a combination of the businesses," the company said.
Martin Read, chair of the company, said: "Wincanton will continue to explore acquisition opportunities to complement its organic growth but we owe it to our shareholders and other stakeholders not to take disproportionate risks in the development of the business."
Wincanton announced on October 18 that it was conducting a due diligence exercise on Eddie Stobart and had until November 15 to announce its intention to make an offer or to announce that it did not intend to make an offer.
In the absence of receiving the requisite information to conduct sufficient due diligence, the deadline was moved to 1700 GMT on Wednesday this week, the company said.
On November 15, Eddie Stobart said private equity firm DBAY Advisors Ltd would not make an offer but would provide a GBP55.0 million capital injection and take a 51% stake in the company's core subsidiary which holds stakes in other trading companies.
Wincanton shares closed 1.2% higher in London at 258.00 pence each. Eddie Stobart is still suspended from trading but last closed at 71p.
By Loreta Juodagalvyte; [email protected]
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