January 28, 2019 / 6:49 AM / 18 days ago

CORRECTED-UPDATE 2-CEVA Logistics does not recommend CMA CGM offer

(Corrects erroneous headline, first paragraph indicating CEVA Logistics was rejecting takeover offer from CMA CGM)

* CMA CGM launches 30 Sfr/shr offer for CEVA Logistics

* CEVA recommends shareholders decline the offer

* Says group is worth 40 Sfr/shr under revised business plan

By John Miller

ZURICH, Jan 28 (Reuters) - Switzerland’s CEVA Logistics on Monday recommended shareholders not accept a 30 Swiss franc ($30.24) per share tender offer from CMA CGM for the remaining shares the French company does not already own.

Marseilles-based CMA CGM offered 30 francs per share in cash, less dilution effects such as any dividend payments made before the deal closes, according to a prospectus published on Monday by the manager of the Vontobel.

CEVA Logistics rejected a $1.54 billion offer last year from Denmark’s DSV, holding firm amid a wave of M&A activity in the fragmented freight forwarding industry.

The 20 largest freight forwarding companies — of which Germany’s DHL Logistics is the largest followed by Switzerland’s Kuehne & Nagel — control only about a third of the market, leaving them at the mercy of ocean shippers and creating an incentive for deals seeking to gain more pricing leverage.

CEVA Logistics’ board of directors conceded that CMA CGM’s offer was “reasonable from a financial perspective” and “provides a fair exit opportunity for shareholders who wish to receive cash for their CEVA shares”, but countered that the Swiss-listed company was worth at least a third more than that.

“The valuation of the revised business plan indicates a midpoint value of 40 francs per share, well above the share price of 30 francs offered,” CEVA Logistics’ board said in a statement.

“Shareholders could realise a higher value with their continuing investment,” CEVA Logistics said, telling them to keep their shares.

CMA CGM was not immediately available for comment.

The French company’s bid announced on Monday matches a pre-tender offer announced in November, which then represented a 46 percent premium.

CEVA Logistics shares closed at 29.85 francs on Friday and were indicated lower in pre-market activity.

DSV this month rebounded from CEVA’s snub and made a $4 billion-plus bid for Switzerland’s Panalpina, another deal which some analysts say could eventually require a sweetened offer to win over shareholders.

Some also contend the urgency of companies to grow via big tie-ups is driving prices to exaggerated levels, in particular for companies like Panalpina, whose profit margins trail those of its rivals.

Kuehne & Nagel majority shareholder Klaus-Michael Kuehne told a business newspaper last week that DSV’s offer “hopelessly overvalued” Panalpina and said he would refrain from bidding, despite Kuehne & Nagel previously saying it was interested in takeover talks.

In addition to Vontobel, lead advisers for CMA CGM’s offer for CEVA are Goldman Sachs and Messier Maris. Financial advisers are BNP Paribas, HSBC and Societe Generale.

$1 = 0.9917 Swiss francs $1 = 0.9922 Swiss francs Reporting by John Miller; Additional reporting by Inti Landauro; Editing by Maria Sheahan and Louise Heavens

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