Analysts talk down Exel bid for Hays
Exel, the world’s third largest logistics company, is likely to pass on the opportunity to buy out Hays’ logistics and haulage arm, in favour of improving
its position in the US and Asia, according to analysts.
Exel reported a £205m underlying pre-tax profit yesterday, 10% up on last year, on the back of new business worth more than £625m and a strong showing on contract renewals. The figures were at the top end of market expectations and boosted Exel’s total dividend 7% to 22.8p for 2002.
The announcement sparked further speculation that Exel would bid for Hays’ £800m-a-year logistics business, which was put up for sale last week. Hays is understood to be seeking £300m for the business.
Exel’s chief executive, John Allan, refused to be drawn on whether he was interested in the acquisition but sector analysts questioned the wisdom of such a move.
BNP Paribas analyst Steven Bowen said: “I just don’t think Hays fits. Exel is in a strong position in Asia and the US, and it will be looking to build on that.
“Hays is a European-based business, and the European market isn’t performing that well. So why would Exel want to take on that problem?”
Exel generates about two-thirds of its sales outside Britain. About 15% of its sales are from the Asia-Pacific region where profits last year rose 23.1% on turnover up 29.2%.
The company is on target to double its Asia business in five years. Overall turnover was up 5% at £4.6bn.
