Danish freight firm DSV floats $4 billion bid for Panalpina

By John Miller and Jacob Gronholt-Pedersen

ZURICH/COPENHAGEN (Reuters) - Danish freight company DSV has launched a bid to buy Swiss rival Panalpina for around 4 billion Swiss francs ($4.1 billion) after pressure from an activist investor for Panalpina to do a deal.

The offer is DSV's second attempt in just a few months to make a major acquisition in a fragmented freight transportation market, after a failed bid for Swiss group Ceva Logistics.

Panalpina said on Wednesday it had received an unsolicited, non-binding proposal from DSV to acquire the company for 170 Swiss francs per share, a 24 percent premium to Tuesday's closing price, made up of cash and DSV shares.

Panalpina's board said it would consider the proposal, despite saying recently it aimed to remain independent.

Activist investor Cevian Capital, which owns 12.3 percent of Panalpina, said last year it wanted the company to be open for a takeover amid its struggles in ocean freight, declining business with the oil and gas industry, a delayed IT system and growth that lagged rivals such as the bigger Kuehne & Nagel.

Any deal must win the blessing of Panalpina's largest shareholder, the Ernst Goehner Foundation, with a nearly 46 percent stake.

The foundation declined to comment on DSV's offer on Wednesday. Cevian also declined to comment.

"A combination of DSV and Panalpina would create a leading global transport and logistics company with significant growth opportunities and potential for value creation," DSV, the world's fifth largest freight forwarder behind rivals such as DHL Logistics and DB Schenker, said in a statement.

In October, DSV abandoned a bid for Ceva after its 1.53 billion Swiss franc bid was rejected.

The Danish company had offered Ceva shareholders a 50 percent premium and said it was willing to raise the offer further. After being spurned, DSV said it was still looking for targets.

At the offer price, DSV's proposal would value Panalpina's 23.7 million outstanding shares at just over 4 billion francs.

Panalpina's shares have fallen 17 percent over the last year.

ACQUISITIONS, INTEGRATION

DSV, with around 44,000 employees and a revenue of 74.9 billion Danish crowns ($11.4 billion) in 2017, has a strong record of integrating and creating value from acquisitions, most notably its $1.35 billion deal for California-based UTi in 2016.

Cevian established itself as Panalpina's second-biggest shareholder in 2010, but has recently gone public with frustrations over the company's development.

In October, Cevian's co-founder Lars Forberg urged the company to replace its chairman and consider a deal.

Weeks later, Panalpina's Chairman Peter Ulber said he would not stand for re-election at the next general meeting in May.

($1 = 0.9881 Swiss francs)

($1 = 6.5463 Danish crowns)

(Editing by Brenna Hughes Neghaiwi and Mark Potter)