📊 Tritax proposes all-share offer to acquire UK Commercial Property REIT

Irbis Index January 2024

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News

Tritax Big Box Reit plc and UK Commercial Property Reit Limited: Statement regarding a possible all-share offer for UK Commercial Property REIT Limited Tritax Big Box REIT plc (BBOX) has announced a possible all-share offer to acquire the entire issued and to be issued ordinary share capital of UK Commercial Property REIT Limited (UKCM).

• The potential offer values each UKCM share at 48 pence per share, representing a 24.3% premium to UKCM's share price on February 10, 2023.

• The possible offer implies an EPRA NTA per share valuation multiple of 1.08x for UKCM based on its EPRA NTA per share as of September 30, 2022.

• If the offer proceeds, UKCM shareholders would own approximately 23.3% of the combined entity.

• The announcement notes that BBOX has the backing of UKCM's two largest shareholders, Phoenix Life and Investec, which combined own 56.5% of UKCM.

• The proposed combination aims to create the UK's fourth-largest real estate investment trust with a £3.9 billion market capitalization.

• The strategic rationale highlighted includes complementary portfolios and opportunities for asset management, capital recycling, and cost savings. (link)

UK rolls out plan to safeguard imports critical to economy The UK government has launched its first critical imports and supply chain strategy to build resilience against global disruptions and reduce reliance on "protectionist or coercive" states.

• It aims to safeguard critical imports like medicines, minerals, and semiconductors that are vital for the economy, national security, and net zero goals.

• The strategy will focus on supply chain analysis, removing import barriers, responding to shocks, adapting to long-term trends, and public-private collaboration.

• Key Actions:

- Establishing a Critical Imports Council for businesses and officials to identify risks and solutions.

- Creating an online portal for companies to report trade disruptions for government action.

- Helping firms stress test and build resilience to supply chain disruptions.

- Securing more trade deals to guarantee access to critical goods.

• Industry associations and companies have welcomed the strategy as an important step, but raised concerns on implementation and investment. (link)

AIT closes on Lubbers acquisition AIT Worldwide Logistics, a US-based global freight forwarder, has acquired three European logistics companies over the past few months - Lubbers Logistics Group, Mach II Shipping, and Global Transport Solutions Group.

• The acquisitions significantly expand AIT's presence in Europe, adding over 45 offices across 13 countries, making Europe AIT's second largest region globally.

• Lubbers and Mach II add expertise in road transportation, freight forwarding, project cargo, and energy logistics while Global Transport specializes in marine spare parts logistics.

• The deals support AIT's strategic priority to grow its European footprint and enhance trade lanes between Europe and Asia.

• AIT plans to leverage the acquisitions to launch a middle-mile trucking network in Europe, similar to its recently established US network.

• The acquisitions allow AIT to boost offerings in key verticals like life sciences, energy, industrial manufacturing, and transportation. (link)

Blue Yonder acquires Flexis Blue Yonder has acquired Flexis AG, a German software company specializing in production optimization and transportation planning solutions for manufacturing.

• Flexis has strong capabilities in areas like production scheduling, order sequencing, vehicle routing which complement Blue Yonder's supply chain platform.

• The acquisition enhances Blue Yonder's offerings for automotive and industrial manufacturing customers needing complex configuration and planning.

• It supports Blue Yonder's strategy to provide an end-to-end supply chain management platform with advanced planning and execution.

• It strengthens Blue Yonder's presence in the automotive sector which is seeing increased digitalization. (link)

DHL Supply Chain and Aramco launch procurement and logistics hub in Saudi Arabia DHL Supply Chain and Aramco have launched a joint venture company named ASMO (Advanced Supply Management Operations) in Saudi Arabia.

• The initiative aims to drive supply chain efficiencies in procurement and logistics, particularly for the energy, chemical, and industrial sectors.

• ASMO is envisioned to meet the growing demand for more sustainable and efficient supply chain services within the country.

• This collaboration is expected to be a significant transformation for the logistics sector in Saudi Arabia, leveraging digital technologies to enhance supply chain services.

• The agreement to develop this new procurement and logistics hub was signed with the intention to support the kingdom's growing logistics needs. (link)

Study finds lack of data analytics and AI use in logistics A recent study by Here Technologies found significant gaps in the use of data analytics and AI among transportation and logistics companies in the US, UK, and Germany.

• While new technologies offer promise, most logistics firms are lagging in adoption of data analytics and AI due to a variety of constraints.

• Only about 50% of logistics professionals said their companies utilize basic data analytics, with just 25% leveraging AI capabilities.

• Cost was cited as the top barrier, followed by potential disruption and lack of expertise.

• Most companies are making some progress on supply chain visibility but less than 25% have made significant progress.

• The findings highlight the "untapped potential of AI" in areas like predictive analytics and optimization. Successful implementation requires overcoming barriers like costs, change management concerns, and talent gaps. (link)

The India Advantage: 6 reasons why Supply chains are leaving China A recent survey found that US executives are 3 times more likely to choose India over China for future supply chain needs.

• 61% said they would source from India if they knew India had the same materials as China.

• Some of the reasons for the India advantage include:

1. Rising costs in China - wages and manufacturing costs have increased, eroding China's cost competitiveness.

2. Geopolitical risks with China - trade tensions, IP threats, reputational risks. India is seen as more reliable.

3. Huge market potential in India - large population allows scaling production.

4. Government incentives in India - attractive schemes like Production Linked Incentives.

5. Infrastructure investments underway in India - roads, ports, etc. to support manufacturing.

6. Proximity benefits - India is closer to the Middle East and Europe than China.

• However, some challenges remain for India like contract enforcement, infrastructure gaps, and bureaucracy. (link)

Earnings

A.P. Moller - Maersk reported solid financial results for 2023, despite facing a difficult environment. The company highlighted "high uncertainty" in its 2024 earnings outlook due to Red Sea disruptions and an oversupply of shipping vessels. Maersk's shares slid 15% after announcing the suspension of share buybacks amid these challenges. The company reported an underlying EBITDA of between $1 billion and $6 billion for the year, compared to $9.6 billion in 2023. Fourth-quarter profit fell below expectations, with EBITDA for the three months dropping to $839 million versus the $1.13 billion anticipated by analysts

XPO Logistics reported its Q4 revenue and earnings, showing a positive performance that exceeded analysts' expectations. The company's earnings per share (EPS) for Q4 were $0.77, surpassing the Zacks Consensus Estimate of $0.61, although this was a decrease from Q4 2022's EPS of $0.98. XPO's revenue for the quarter reached $1.94 billion, beating the Zacks Consensus Estimate of $1.9 billion and marking a 6% increase compared to Q4 2022's revenue of $1.83 billion. For the full year 2023, XPO reported an EPS of $2.92, down from FY 2022's $3.53, with the company's revenue for FY 2023 totaling $4.67 billion, a slight increase of 0.4% compared to FY 2022's $4.65 billion.

People

Forward Air CEO Tom Schmitt has exited the company following the recent completion of its acquisition of Omni Logistics, with Chief Legal Officer Michael Hance appointed as interim CEO.

DSV announces changes to the Executive Board and the Group Executive Committee led by the appointment of Jens H. Lund as the company's new Group CEO after 15+ years under outgoing CEO Jens Bjørn Andersen.

Jason Bergman, former Chief Commercial Officer at Yellow Corporation, has been appointed as the new Chief Executive Officer of global third-party logistics provider Axis Global Logistics.

SKF has announced leadership changes with Manish Bhatnagar appointed as the new President for the Americas region and Fredrik Hallen taking interim charge as President for the India & Southeast Asia region, as part of accelerating the company's strategic transformation.

Other headlines 

Mexico surpassed China in 2023 to become the top exporter of goods to the United States for the first time in over 20 years.

Rock-it Cargo acquires SOS Global to create the largest specialty logistics provider in the sports and broadcast market

Maersk has launched a new fully digital, online solution for instant pricing and booking of air freight cargo globally on Maersk.com.

C.H. Robinson automates scheduling appointments. The new technology enables touchless, automated truckload appointments, saving shippers over 7 hours per load on average.

Online grocer Misfits Market has launched a new perishable fulfillment service called Fulfilled by Misfits, leveraging its logistics infrastructure to offer storage, picking, packing and delivery solutions for direct-to-consumer food brands.

Supply chain finance platform Cashinvoice has raised $3.4 million in a Series A funding round led by Pravega Ventures, HDFC Bank and existing investor Accion Venture Lab to strengthen its business and launch new products.

Delivery robot company Starship Technologies has raised $90 million in new funding led by Plural and Iconical to expand its autonomous sidewalk delivery services globally.

Daimler Trucks has made progress in advancing its prototype hydrogen fuel cell truck, the Mercedes-Benz GenH2, receiving approval from German authorities for testing on public roads using subcooled liquid hydrogen (sLH2) fueling technology.

Yodel, the UK parcel delivery company owned by the Barclay family, is reportedly close to administration as talks with potential buyers reach final stages amid financial pressures.

Negotiations for Harim Group's acquisition of a controlling stake in HMM have collapsed due to differences over management rights and other issues, leaving the shipping company's future uncertain.

Bankrupt trucking company Yellow has fully repaid the controversial $700 million COVID-era government loan it received in 2020, along with over $151 million in interest.