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Denmark's DSV to keep hunting big targets after Panalpina - CEO

Denmark's DSV to keep hunting big targets after Panalpina - CEO
FILE PHOTO: Denmark’s DSV CEO Jens Bjorn Andersen (R) talks to a truck driver at the company’s headquarter outside Copenhagen, Denmark, October 3, 2016. REUTERS/Jacob Gronholt-Pedersen   -   Copyright  Jacob Gronholt-Pedersen(Reuters)
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By John Miller

ZURICH (Reuters) – Denmark’s DSV <DSV.CO>, whose tentative $4 billion bid for Swiss shipper Panalpina <PWTN.S> would be its largest takeover, will seek additional billion-dollar deals regardless of this offer’s fate, Chief Executive Jens Bjorn Andersen said.

“For sure, we will continue to do that,” Andersen told reporters on Wednesday. “It is the best way we can spend the money we generate ourselves.”

In Zurich for meetings, Andersen said the allure of cost-cutting, including slashing duplicate jobs, as well as broadening global reach with Panalpina’s air- and sea-freight operations, are driving his bid to create what would be the world’s No. 4 freight-forwarding company.

Only DHL Logistics, Kuehne & Nagel <KNIN.S> and DB Schenker would be bigger.

Panalpina has said it is considering the approach.

DSV’s cash-and-shares bid last week came as the Swiss company faced pressure from an activist, 12.3 percent owner Cevian Capital, for a deal amid differences over strategy.

Some analysts suggest DSV may have to up the ante to get Panalpina’s biggest shareholder — the Ernst Goehner Foundation, with a 46 percent stake — to cooperate.

The foundation has declined comment, while Cevian has said it likes the DSV tie-up.

Andersen declined comment on boosting his offer, insisting only that DSV would remain disciplined. He described the existing bid as “much better” than its 170 franc-per share value when it was announced on Jan. 16, since DSV stock has risen 11 percent since then.

Panalpina’s shares have climbed 34 percent, to a 4.2 billion Swiss francs (3.23 billion pounds) market capitalisation.

Despite DSV’s failed attempt to buy Switzerland’s CEVA Logistics <CEVAL.S> last year, Andersen said he was not under pressure to rack up a win at all costs.


“We are not afraid of failing twice,” Andersen said. “The future success of DSV is not dependent on this acquisition.”

CEVA eventually agreed to be bought by France’s CMACGM.

Also last year, Switzerland’s Kuehne & Nagel voiced interest in takeover talks with Panalpina.

Andersen said DSV’s gambit was not simply to box out a bigger competitor. “We cannot spend what is equivalent to around 4 billion Swiss francs in a defensive move,” he said, adding the market will remain fragmented — the top 20 freight-forwarders now have just 30 percent market share — regardless of who owns Panalpina.

Panalpina’s 2.12 percent dividend yield, according to Refinitiv data, dwarfs DSV’s 0.39 percent yield. Amid grumbling over the difference, Andersen said DSV would consider boosting payouts “slightly” should investors demand it.

(Reporting by John Miller and Oliver Hirt; Editing by Michael Shields)

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