1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188 
Salvesen feels pain of a failed romance
Page 19
If you've noticed an error in this article please click here to report it so we can fix it.
It looked like TDG and Christian Salvesen were a match made in heaven but suddenly the merger talks have come to a dead end. So where did it all go wrong? Jennifer Ball reports.
Christian Salvesen and TDG are staying tight-lipped about why three weeks of merger talks have amounted to precisely nothing.
If the merger had gone ahead it would have created the third largest logistics group in the UK — behind the newly enlarged Exel and Wincanton—with a turnover of around £1.3bn.
Salvesen is merely saying that "preliminary negotiations have now ceased", with the promise of a new CEO shortly. TDG's statement is no more illuminating, although chief executive David Garman says the two firms could not find a way forward.
Industry analysts suggest that the two firms have different priorities. Salvesen sees its on the strength primarily Continent, winning new contracts such as the logistics activities of Unilever's ice cream and frozen foods subsidiary in Belgium and a major contract with Spar Retail, also in Belgium.TDG is more committed to the UK and selective Continental expansion.
But the end of negotiations caps a disastrous year for Salvesen. CEO Edward Roderick left last May after a string of profits warnings; a problem at its pea processing plant cost its frozen vegetable business £3m; and its shares fell 15% over the summer to just 48p following a series of poor results.
In fact talk of a merger was the first good news from the company in months —it appeared to be finally turning a corner. So what happens now the talks are over? John Manners-Bell of consultancy Transport Intelligence sees no individual future for either Salvesen orTDG in a consolidating marketplace, saying: "1 believe that both these firms will be acquired in the short to mid-term."
Speculation in the marketplace suggests that the takeover saga surrounding Salvesen could be far from over. The firm is being watched closely by Wincanton as they have a strong geographical fit within the UK. while Salvesen also has a strong presence in France and Spain where Wincanton lacks presence.
"Winean ton is still a likely buyer as it wants to size up to be a stronger player in the UK. especially given the merger of Exel and Tibbett Sz Britten," says Manners-Bell.
"Margins are low, largely due to the strength of the major retailers and consumer goods manufacturers. Developing its scale would give Wincanton more power in the marketplace." he concludes.
Looking further alield there could be a number of other suitors waiting in the wings: Deutsche Post has already snapped up Securicar Omega Holdings and adding Salvesen would strengthen its presence in the UK.
The Salvesen family, which own 30% of the company, has blocked several takeover attempts by Hays and Swiss investor Custos, hinting that it would be more open to a merger than a takeover.
But given the failure of the talks with TDG and a subsequent 7% slump in its share price it leaves Salvesen weaker than before and more vulnerable to takeover bids from others. Watch this space.•