CMA CGM abandons bidding for UK logistics specialist Wincanton

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French container shipping group CMA CGM abandoned its pursuit of UK logistics company Wincanton on Tuesday, making it almost certain that a rival bid by GXO would succeed.

The French company, which operates the world’s third-largest container ship fleet, announced it was pulling out of the contest after US group GXO on Thursday trumped CMA CGM’s 480p a share cash bid.

GXO is offering 605p a share in cash, valuing the company’s equity at £762mn.

CMA CGM, which made the offer through its Ceva logistics subsidiary, originally offered 450p a share for Wincanton on January 19. It improved its offer to 480p on February 26 after Wincanton announced it had received an approach from a potential competing bidder.

The UK’s Takeover Panel had given CMA CGM four business days following the GXO offer to decide whether to increase its offer further. It announced on Tuesday that it would instead allow its offer for Wincanton to lapse.

“Ceva felt that the increased and final offer represented a very attractive opportunity for all Wincanton stakeholders,” said CMA CGM.

The abandonment of the bid is a setback for CMA CGM’s efforts to develop a stronger logistics function to complement its core shipping business. It has been on an acquisition spree in logistics in recent years, helped by massive profits earned during the pandemic.

The group said on Tuesday that it would “continue deploying its growth road map . . . and very robust balance sheet, while always maintaining a clear focus on value creation”.

GXO’s bid is now highly likely to succeed. Announcing it last week, the company said that buying Wincanton would boost its position in a key market in the UK and Ireland. Wincanton’s board on Friday withdrew its previous recommendation of the CMA CGM bid.

Wincanton’s shares were down 4.3 per cent on Tuesday at 597p in response to CMA CGM’s withdrawal. However, they are still more than twice what they were as recently as January 18, the day before the announcement of the initial CMA CGM bid.

GXO, which is based in Greenwich, Connecticut, specialises in providing supply chain services including customer deliveries. Wincanton specialises in providing distribution and other supply-chain services directly to companies.

Wincanton did not immediately respond to CMA CGM’s announcement.