The UK's largest third-party logistics firm Wincanton (WIN) has announced that it is considering a potential offer for smaller rival Eddie Stobart Logistics (ESL:AIM), sending its shares up 0.8% to 236p.
Wincanton is the third potential suitor for troubled Eddie Stobart in less than a month after the latter – known for its famous green and red lorries – became embroiled in an accountancy scandal which led to the resignation of its chief executive. Shares in Eddie Stobart are currently suspended.
Wincanton's interest, which would create one of the UK’s largest logistics groups, raises the chance of a bidding war with Stobart's second largest shareholder DBay Advisors.
The private equity firm owns around 10% of ESL and has also been in discussions regarding a takeover. Under the stock exchange's Takeover Code, DBay Advisors has until 5pm on 28 October to announce a formal bid or walk away from a deal (the so-called 'put up or shut up rule').
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In a brief statement today Wincanton said, ‘The Board is currently undertaking a diligence exercise on Eddie Stobart and its assets, in order to enable it to assess the potential merits of a combination.
‘No proposal has been made by Wincanton to Eddie Stobart as to the terms of any potential offer, and there can be no certainty that any offer will be made to Eddie Stobart shareholders.’
A Shares Great Idea, Wincanton itself received plenty of attention earlier this year having been the prime beneficiary of a stockpiling frenzy as the UK originally prepared to leave the EU on 31 March.
On top of the Brexit-induced rush of orders, Wincanton won several new contracts with high-profile customers such as Co-op, EDF Energy and HMRC, as well as extensions or renewals of existing contracts with major clients including Asda and Halfords (HFD).
As the Brexit deadline once again approaches, a lot of manufacturers have been ramping up their stockpiling, something which naturally plays to Wincanton’s strengths.