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The logistics company, best known for its green and red trucks, continues to be of interest to bidders. DBAY Advisors Limited, the private equity group that took Eddie Stobart public in 2017, did not announce a firm offer, but has instead put forward a refinancing proposal which is subject to shareholder approval. Meanwhile, Wincanton plc, the logistics group, has had its PUSU deadline extended to 27 November 2019.
Certain details of DBAY’s proposed financing had been reported in the press, following which Eddie Stobart issued a statement in response, outlining broadly the proposed financing.
DBAY confirmed on 14 November 2019 that it did not intend to make a firm offer. It highlighted that it intended to inject £55 million into Eddie Stobart’s operations via a sale and purchase agreement (SPA). The agreement will see DBAY acquire a 51% stake in a wholly-owned subsidiary of Eddie Stobart known as GreenWhitestar. This subsidiary holds Eddie Stobart’s interests in the trading companies of the group. 49% of the company would be held by the remaining shareholders of the company.
As part of this transaction, DBAY will provide the financing through a payment in kind (PIK) facility. The debt would initially carry a 25% interest rate between shareholder approval and completion, and 18% thereafter. The proposed financing would also be subject to FCA approval. The transaction is recommended by the board and on 20 November 2019, the company published a circular and notice for a general meeting on 6 December 2019 to approve the transaction.
Meanwhile, Wincanton plc has urged shareholders not to support the transaction. In a statement, Wincanton pressed Eddie Stobart to publish key financial information and the result of the audit that is taking place following the accounting scandal that has shaken the company. Wincanton stated that any combination between themselves and Eddie Stobart will create more value than any proposal that has been made by DBAY.
Market Tracker will continue to monitor these transactions as they develop.
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Market Tracker is a unique service for corporate lawyers housed within Lexis®PSL Corporate. It features a powerful transaction data analysis tool for accessing, analysing and comparing the specific features of corporate transactions, with a comprehensive and searchable library of deal documentation across 14 different deal types. The Market Tracker product also includes news and analysis of key corporate deals and activity and in-depth analysis of recent trends in corporate transactions.
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