Bidders' interest wanes for Hays logistics sale
Interest has waned in Hays’ logistics operations, raising doubts about the likely success of Colin Matthews’ plans to break-up the business services group.
Exel, the freight and logistics group, has dropped out of bidding for the division, estimated by analysts to be worth £200m-£300m when it was put up for sale last month.
Rival Tibbett & Britten is also thought unlikely to pursue it.
Several private equity buyers, believed to include Cinven, are also no longer taking part in the auction.
Meanwhile, interested parties said they thought TPG, which is believed to have cast its eye over Hays’ logistics division, was more interested in its mail business, which has yet to be put on the market. Both Exel and Tibbett & Britten signalled their interest in Hays’ logistics arm soon after Mr Matthews set out his plans to dismantle the business services empire. Cinven was earlier on in the process seen as a strong contender to clinch the division.
Conditions in the contract logistics market, along with concerns about the impact that a key contract with Waitrose could have on the sale process, are believed to have influenced some to drop out.
However, both trade and financial buyers remain in the auction, which is believed to have reached the short-list stage. Despite the decisions by some not to carry on, Hays is understood to be content with the level of interest in the logistics unit.
Meanwhile, Hays’ advisers, Schroder Salomon Smith Barney, have circulated a sales memorandum to parties potentially interested in Hays’ information management business, estimated by analysts to be worth up to £160m.
This is expected to generate strong interest, from both trade and financial buyers. Among the companies interested in this division are Brambles, which could combine it with its own Recall document storage arm.
Mr Matthews plans to sell off four of Hays’ units – business process outsourcing and mail and express, in addition to logistics and information management – to focus on recruitment.
The logistics business will be the first to be sold. Mail and express is expected to be put on the block, possibly next year.
