Exel Acquisition: UPS Tipped to Launch Counter Bid
published: cw 36, 2005 in Mergers & acquisitionsFollowing news last week that Deutsche Post World Net has entered into talks with Exel regarding a possible acquisition, speculation has heightened over a potential bidding war. UPS has been tipped as the front runner to challenge DPWN for the UK contract logistics and freight forwarding company and reports in the national press suggest that it is presently talking with a number of investment banks, including Goldman Sachs, over a possible bid. UPS has considerable cash resources at its command, and many people believe that it could outbid DPWN should it wish. It would be surprising if UPS had not already given serious attention to Exel, although it might not want to be drawn into competition with DPWN.
Deutsche Post is believed by analysts to be willing to pay up to ?13 (?19) a share. At close of business on Friday Exel?s share price stood at ?11.75. However there are rumours that DPWN?s own shareholders are not happy with what some believe is the prospect of overpaying for Exel although with a large proportion of shares held by a German state investment bank, KFW, approval for the eventual deal is not thought to be a problem. DPWN?s shares dropped two days running following the bid talks announcement.
Exel and DPWN’s management are thought to have met over the weekend in order to accelerate the bid process. This could see events occurring quickly if other companies are to halt DPWN’s bid to dominate the global contract logistics market.
Source: Transportation Intelligence
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