CVC sets out benefits of its 'superior' offer for Schenker in letter to DB
Private equity firm says its proposal would create a 'global logistics powerhouse'
CVC Capital Partners has written to Deutsche Bahn (DB) outlining the benefits of its €4.5bn offer for Schenker, the German rail operator's logistics arm. In the letter, CVC argues that its proposal is "superior" to DB's own plans for Schenker and would create a "global logistics powerhouse".
CVC's offer
CVC's offer for Schenker comprises €3.5bn in cash and €1bn in convertible bonds. The private equity firm says that its proposal would give Schenker the financial flexibility it needs to invest in growth and compete with its global rivals.
CVC also argues that its offer would create a "global logistics powerhouse" by combining Schenker with its own portfolio of logistics businesses. This would give Schenker access to new markets and customers, and would allow it to offer a wider range of services.
DB's plans
DB has been considering the sale of Schenker for some time. The German rail operator is under pressure to reduce its debt and improve its profitability. However, DB has also said that it is committed to keeping Schenker within the group.
DB's own plans for Schenker include a partial IPO and a strategic partnership with a third-party logistics provider. However, CVC argues that its offer is more attractive than DB's plans and would provide greater value for Schenker's shareholders.
Conclusion
The battle for Schenker is now likely to intensify. CVC's offer has put pressure on DB to come up with a more attractive proposal for Schenker's shareholders. It remains to be seen whether DB will be able to match CVC's offer or whether Schenker will be sold to a private equity firm.
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