Thursday, October 11, 2018

Container Shipping Line Increases Shares in Third Party Logistics Outfit as Bid Fails

Unsolicited Offer Pushes French Group to Extend Stock Holding and Support 3PL Management
Shipping News Feature
FRANCE – SWITZERLAND – WORLDWIDE – Marseille headquartered container shipping line CMA CGM, which took a 24.9% share in third party logistics outfit Ceva in April, says it supports the decision of the Swiss operations board of directors to refuse the unsolicited offer it has received to acquire the company from an unnamed bidder. The French group received approval to increase its holding in the 3PL to 33% with immediate effect.

The offer has prompted CMA CGM to issue notice of what it intends to do in harness with its new partner. It says it plans to ‘unlock Ceva’s potential by way of several initiatives'. These include a proposed turnaround in the company’s fortunes by reinforcing and reorganising management whilst selling Ceva’s logistics services to existing container based customers. There is also talk of the box carrier taking more stock in the near future.

The intention is to transform Ceva’s IT systems and contribute to its freight management activities ‘thereby reinforcing the CEVA platform and delivering scale benefits’. With these changes CMA CGM management says it will turn CEVA into a more profitable entity and ‘better position the company to seize significant value-creation opportunities to benefit Ceva, its employees and shareholders’.

Ceva recently appointed a new CFO, hiring the vastly experienced Serge Corbel who has not only worked with the French company since 1991 but has also been involved with Neptune Orient Lines (NOL) and American President Lines (APL), working as CFO for both when CMA CGM acquired those companies. Corbel was apparently also a key figure in assisting Ceva when the 3PL launched an IPO on the Swiss SIX exchange in May which raise $1.14 billion, the largest listing of the year on that exchange at that point in time. Corbel will take up his new post on October 15.

The price offered for Ceva by the anonymous bidders was CHF27.75 compared to the current share price of CHF24.52. One name that did the rounds at the time of the CMA CGM acquisition was that of XPO Logistics whose board were thought to be considering the investment. The synergy between the two groups would certainly result in some radical changes, something XPO boss Bradley Jacobs would certainly not shy away from. Whether it is the Rhode Island born chairman and CEO who made the latest bid is currently mere speculation however.

Photo: Serge Corbel is key to the relationship between CMA CGM and Ceva.