Eddie Stobart Logistics (ESL) has hit back at Wincanton's claims this week that it has withdrawn its interest in bidding for the company due to a lack of financial information, insisting it gave Wincanton “extensive due diligence commensurate with its status as a strategic competitor".
Wincanton withdrew its interest in bidding for ESL yesterday (25 November), citing concerns about ESL's “financial performance and ongoing liquidity".
In a Stock Exchange announcement, Wincanton said it had not received "full disclosure of the information requested to enable it to complete its due diligence exercise" and still had "no visibility on when Eddie Stobart's auditor's review may be complete".
It added: "The recent disclosures by Eddie Stobart have confirmed a material reduction in EBIT, poor cash collection and higher net debt.
"Even with the incremental synergies which would be available to a trade buyer such as Wincanton, the Board cannot see how concerns with regards to Eddie Stobart's financial performance and ongoing liquidity can be sufficiently overcome to enhance Wincanton's shareholder value through a combination of the businesses.
"As a result, the Board has decided that it would not be acting in the best interests of Wincanton shareholders to proceed with an offer for Eddie Stobart."
Wincanton chairman Dr Martin Read added: “Wincanton will continue to explore acquisition opportunities to complement its organic growth but we owe it to our shareholders and other stakeholders not to take disproportionate risks in the development of the business."
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Responding to Wincanton's decision to withdraw, ESL said: “The Board of Eddie Stobart is disappointed that Wincanton felt it was unable to put forward an offer to shareholders despite being granted access to extensive due diligence, commensurate with its status as a strategic competitor to Eddie Stobart, since mid-September 2019.
"This included provision of comprehensive company information, alongside multiple meetings with senior and divisional management of Eddie Stobart for both Wincanton and its advisers.
"The Board actively encouraged Wincanton to put forward a proposal to the Board, and ultimately to shareholders. However, at no stage of their involvement in the process was any offer forthcoming, nor any indication as to the terms of any offer should one be forthcoming.”
Wincanton’s withdrawal leaves the field open for rival bidder DBAY Advisors which is offering to provide a £55m capital injection and take a 51% stake in the company's core subsidiary Greenwhitestar Acquisitions.
The board will put DBAY’s offer to its shareholders on 6 December.
ESL added that "believes the proposed transaction to be in the best interests of the company and its shareholders as a whole".
