U.K. logistics retailer Clipper Logistics CLG-1.46% said Monday it has agreed to a possible takeover by U.S. peer GXO Logistics GXO+0.18% in a deal valuing the company at around £943 million ($1.3 billion).
The deal would bring together “two natural partners with a very strong cultural fit,” the companies said in a statement, while enhancing GXO’s position as a “well-capitalized pure-play logistics leader.”
GXO (ticker: GXO) was spun off from shipping and trucking services provider XPO Logistics (XPO) last year, creating a pure-play contract logistics provider. Clipper (CLG.London) is a retail logistics company that partners with a number of the U.K.’s biggest retail brands, as well as operating in Europe.
The possible cash-and-stock offer implies a total valuation of 920 pence per share, the companies said, which represents an 18% premium to Clipper’s closing price Friday. The offer would comprise of 690 pence per share in cash and the equivalent value of 230 pence in GXO shares.
The board of Clipper said it is minded to unanimously recommend the deal to shareholders if a firm offer is made.
Clipper stock surged 14% in early trading Monday but still sat below the implied price offer at 886 pence. The U.S. stock market is closed Monday in observance of Presidents Day. GXO Logistics stock, which fell 3.5% Friday, has fallen 10.6% year-to-date, compared to the S&P 500’s 8.8% drop over the same period.
“Clipper Logistics has made a big name for itself in recent years by being the brains and muscle behind e-commerce return services for most of the big U.K. retailers,” AJ Bell investment director Russ Mould said.
After last year’s spin off GXO is now “eager to make a name for itself as a standalone business, with ambitious management seeing the value in adding Clipper to its operations,” he added.
