Tuesday, March 19, 2019

Container Shipping Group Poised to Control Major Logistics Group

Shareholders Threatened with 'Cancellation or Squeeze Out'
Shipping News Feature
FRANCE – SWITZERLAND – WORLDWIDE – French container shipping giant CMA CGM has updated its position regarding the acquisition of freight forwarding and logistics group CEVA telling remaining shareholders they should sell their shares at the offer rate of CHF 30 each or witness a 'squeeze out', the process by which shares can be acquired in a take-over by the company purchaser at a rate 'considered fair'.

On 28 January CMA CGM made the initial offer for all publicly held registered shares of CEVA Logistics AG and, during the initial offer period, which took place between 12 February and 13 March, a total of 21,475,325 CEVA shares were tendered. Upon settlement of the Offer, this could result in CMA CGM holding at least 49,388,515 CEVA shares, corresponding to 89.47% of the share capital and voting rights of CEVA.

This scenario includes the total of CEVA shares currently held by the French group (33%) plus another 17.6% held by banks which CMA CGM says it is acting in concert with and which, subject to the receipt of certain regulatory approvals, could be obtained by CMA CGM through a total return swap and two forward share purchase agreements.

In the Offer prospectus, CMA CGM reserved 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. Due to its current stockholding holding this process by CMA CGM becomes extremely likely. If this 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.

In light of the results of the initial offer period, CEVA’s Board of Directors has decided to recommend that remaining shareholders tender their CEVA shares during the upcoming additional offer period, which will commence on 20 March and close on 2 April 2019. 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.

It is 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, 2019, 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.

This deal will give the operations of CMA CGM, currently the world’s third largest ocean container carrier, a broader range in the wider logistics market. CEVA operates as a 3PL with a global network which covers over 160 countries, offices and terminals manned by 58,000 staff which generated revenue last year of $7.4 billion with an adjusted EBITDA of $ 260 million.