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French court puts XPO buyout of Norbert Dentressangle back on track

THE Paris Commercial Court has granted an injunction to Connecticut-based XPO Logistics that prevents Elliott Capital Advisors, a New York private equity firm, from selling its shares in Norbert Dentressangle to any party other than XPO Logistics, reports the Wall Street Journal.

French court puts XPO buyout of Norbert Dentressangle back on track
10 July 2015 - 19:18

French court puts XPO buyout of Norbert Dentressangle back on track

THE Paris Commercial Court has granted an injunction to Connecticut-based XPO Logistics that prevents Elliott Capital Advisors, a New York private equity firm, from selling its shares in Norbert Dentressangle to any party other than XPO Logistics, reports the Wall Street Journal.

XPO agreed in principle to purchase Norbert Dentressangle for US$3.5 billion in April and it appeared the acquisition would go through with little to no resistance until New York's Elliot Capital showed up.

The PE hedge fund holds 7.5 per cent stake of French forwarding giant Norbert Dentressangle, which is not enough to prevent the sale, but enough to change the pricing. 

What Elliot, was attempting, said the Wall Street Journal, was to get XPO to pay a premium for its stake by preventing XPO from delisting ND shares in France.

"XPO needs to control 95 per cent of Norbert's shares to delist the company on the Euronext Paris exchange," said Wells Fargo analyst Casey Deak.

XPO, which has built itself into one of the largest 3PLs worldwide through a series of similar acquisitions, "just doesn't want any loose ends or shares left on the table," said Mr Deak. 

Owning Norbert Dentressangle, which is almost twice the size of XPO, would give the American firm a strong presence in Europe. The combined company would have annual revenues of $8.5 billion, nearly two years ahead of XPO's 2017 target of $9 billion and $5.5 billion more than XPO reported in 2014.

In April, there was a change in the rankings of the world's 50 largest logistics companies, that had XPO Logistics joining the list after nine acquisitions, including New Breed Logistics, Pacer and 3PD. This raised XPO revenue 235.8 per cent to $2.3 billion last year.

Norbert Dentressangle rose to the 23rd spot on the list from 24th, in part because of the impact of its 2013 takeover of Fiege's logistics operations in Italy, Spain and Portugal, as well as its July 2014 acquisition of Des Moines-based Jacobson Companies from private equity firm Oak Hill Capital Partners.

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