Panalpina ‘in discussions’ with Agility, mulling over DSV’s revised offer

After several days of industry speculation about mergers and acquisitions (M&A) activity in the freight forwarding sector, the pas de deux between Panalpina and DSV A/V just got more complicated by a third party that has been added to the dance card: Agility Global Logistics.

In a short statement today, the Swiss forwarder acknowledged that “the Board of Directors of Panalpina confirmed media reports that it is in discussions with Agility Group on potential strategic opportunities with regard to their respective logistics businesses,” adding that negotiations “are at a preliminary stage.”

Kuwait-based Agility later confirmed that it is in “early discussions with Panalpina about partnership opportunities” and that is “is always exploring opportunities to grow its business and maximize shareholder value.”

Meanwhile, the pursuer itself continues to be pursued. The Denmark-based firm DSV, which on Jan. 16 had made an offer to purchase Panalpina at US$170 per share, from a combination of cash and DSV shares, adding up to about US$4 billion – a deal that Panalpina later rejected – upped the bid on Feb. 6 to $180 per share in an all-cash offer.

The revised offer, DSV said today, “was made in response to feedback received from Panalpina and included, e.g., certain commitments to be specified towards Panalpina’s employees and the Panalpina heritage.” The Danish company also noted that the second offer “equates to an enterprise value to 2018 EBITDA multiple of 24x, based on broker consensus.”

Panalpina today acknowledged the $180-per-share offer and said its board is “reviewing the proposal from DSV in conjunction with its professional advisers,” adding that “further announcements will be made as appropriate.”

One of those advisers is sure to be the Ernst Göhner Foundation, Panalpina’s largest shareholder, owning about 46 percent of total share capital. On Feb. 4, Panalpina said the foundation would not support DSV’s original offer of $170 per share, but said it did support the board’s pursuit of an “independent growth strategy that includes M&A,” which became self-evident with the Agility announcement.

On Thursday, Panalpina CEO Stefan Karlen was quoted in the Swiss financial journal, Finanz und Wirtschaft, saying that, despite being a takeover target of DSV, the forwarder was also seeking to grow “organically and inorganically” through M&A, saying that a November 2018 bond issue puts Panalpina in a good position for a future takeover.

According to a report from Bloomberg, Panalpina’s move to acquire Agility is being supported by Ernst Göhner Foundation, and would likely involve a stock element. If talks go well, the report states, a decision on the deal may happen as early as next week.

Whatever happens between the three forwarding giants – Panalpina is No. 4, DSV is No. 10 and Agility is No. 14 on Air Cargo World’s most recent “Power 25” list of global forwarders – expect more twists and turns to come in the next few weeks.

Those interested in learning more about the latest shakeups in the freight forwarding industry are invited to join us at Cargo Facts Asia 2019, to be held 15-17 at the Langham Shanghai. For more information, or to register, visit www.cargofactsasia.com. Discounted early-bird registration ends 1 March.