Wincanton bids for TDG

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Wincanton has confirmed that it has approached the board of TDG with an indicative cash offer for TDG at a value of 281.25 pence per ordinary share.

The offer is 15 pence per share higher than the indicative offer included in Laxey Partners’ announcement on 27 February 2008.
[asset_ref id=”54″]Wincanton’s indicative cash offer would represent a premium of approximately 22 per cent. to TDG’s closing share price on 8 May  and a premium of approximately 30 per cent. to TDG’s closing share price of 225.5 pence (less the dividend of 8.75 pence per share proposed on 27 February and payable on 23 May 2008 which shareholders are entitled to retain) on 26 February 2008.

Wincanton says it has undertaken preliminary due diligence “with assistance from the Board of TDG, which supports its view that there is merit in continuing to explore a combination of the two businesses in terms of operational overlap and complementary sector and geographic coverage. Wincanton also believes that there may be attractive opportunities to generate significant profit improvement through both cost-driven synergies and operational efficiencies and to create value through improved utilisation of the combined property portfolio.

However, it said that the announcement of a formal offer would be subject to the recommendation of the Board of TDG, finalisation of financing, and satisfactory support from TDG’s major shareholders.

At the end of February Laxey Partners offered 266.25p a share and it has just completed its due diligence process. As a result, it has reconfirmed its interest in pursuing an offer for the group at 266.25p a share.

TDG is now seeking seek to agree with Laxey Partners, Wincanton and the Takeover Panel a formal timetable in which each party must either announce a firm intention to make an offer for TDG or announce that it does not intend to make an offer.

Reviewing TDG’s  first quarter’s performance, chairman Charles Mackay said: “The Group has made a good start to the year, with trading in the first three months ahead of our previous expectations and well ahead of the comparable period in 2007. As a consequence, we expect the first half profits to be less weighted to the second quarter than was the case last year.

“Cash flow in the first quarter has also been better than expected with a lower working capital requirement and the benefit of proceeds from the sale of a surplus property in the Netherlands. This has funded our continuing programme of capital expenditure in support of trading opportunities. Despite the increased strength of the Euro, net debt at the end of the quarter was £19.0m, compared with £21.1m at 31 December 2007.

“While gross new business wins in the first quarter have been at a similar level to that in 2007, with most of this won in the more specialised areas of our business, net wins have been lower as a result of a particular customer consolidation in the retail sector.

“There is some evidence of customers delaying placing orders with us given the uncertainty surrounding our ownership. This situation has also constrained our ability to make earnings enhancing acquisitions. However we do not, at this stage, expect these issues to prevent the Group from meeting its previous trading expectations for 2008.”

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