Australia's Brambles confirms talks with CVC Capital after $13.9 bln deal report

Credit: REUTERS/Daniel Munoz

Adds shares, background

May 16 (Reuters) - Australian logistics firm Brambles Ltd BXB.AX said on Monday it was weighing an unsolicited takeover offer from European private equity company CVC Capital Partners, which a report pegged it at A$20 billion ($13.89 billion) including debt.

Shares of Brambles jumped as much as 13.3% to an eight-month high of A$11.82, logging their sharpest intraday percentage gain since February 2003, after the pallets and container supplier confirmed the talks.

If the deal goes through, it would be the biggest private equity takeover in the country. Brambles' market value stood at A$15 billion, as of Friday's close, according to Refinitiv data.

"Brambles notes the engagement is preliminary, incomplete and there has been no formal proposal received from CVC," Brambles said in a statement.

CVC Capital could not be immediately reached for comment on the deal terms.

Brambles, which rents crates and pallets globally to fast-moving consumer goods companies, is well-positioned to benefit from the current crunch in container availability amid a pandemic-fuelled boom in e-commerce activity.

The company has been under investor scrutiny for its proposal to build a plastic pool for its customers in the United States, including big-box retailer Costco COST.O.

In its April trading update, Brambles had flagged headwinds from supply chain constraints amid the Russia-Ukraine conflict and rising inflation that will affect its outlook for the next year.

"The board is also considering other strategic options for the company that maximise shareholder value," it added.

($1 = 1.4403 Australian dollars)

(Reporting by Savyata Mishra in Bengaluru; editing by Jonathan Oatis and ubhranshu Sahu)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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