UK Exel shares rise on takeover talk
Shares in British logistics provider Exel closed up 9 percent at a two-and-a-half year high on Tuesday on speculation it is the target of a takeover bid. The BBC reported that industry speculation has focused on United Parcel Services as the most likely bidder. DHL, a unit of Germany’s Deutsche Post, and finance firm GE Capital have also been prominently mentioned. At Tuesday’s market close, Exel was valued at $6.3 billion. Exel employs 109,000 people in more than 120 countries and has itself been active in the consolidation of the logistics sector, buying UK firm Tibbett & Britten last August.
Exel hit by profit taking as bid talk subsides, B.Stearns downgrades
AFX UK ProFeed 02-02-2005
LONDON (AFX) – Shares in Exel PLC were under pressure in late morning trade, hit by profit taking after recent gains, as a much-awaited bid for the UK logistics group failed to materialise, dealers said.
Bear Stearns downgraded its rating on the group to ‘peer perform’ from ‘outperform’, arguing that with the shares up 20 pct since the announcement of the acquisition of Tibbett & Britten last June, it does not see a fundamental reason to be long and would recommend locking in some profits.
It also noted that Exel shares rose 9 pct yesterday as bid speculation by the market and the press intensified.
Bear Stearns added that there is no hard evidence of any transaction, imminent or otherwise, although it has said for a long time that consolidation in the industry was bound to continue.
The broker pointed out that UPS, Deutsche Post and Federal Express have been key industry consolidators and believes they are likely to continue down this path given their scale, breadth/depth of existing services and balance sheet strength.
Bear Stearns said it believes a 10 pct takeout premium to its 860 pence per share fair value for Exel is within reason given its strong positions in the global freight forwarding and contract logistics markets and the potential synergy benefits it could offer any potential buyer.
By 11.10 am Exel shares were down 38-1/2 pence at 834-1/2.
