Rescue bid for crisis hit Eddie Stobart could save thousands of jobs

Struggling haulage firm Eddie Stobart has confirmed a rescue bid has been put together by its former controlling shareholder.

The Warrington business is fighting for survival after its shares were suspended in the summer.

Former controlling shareholder DBAY Advisors has launched a bid for the firm which would see it inject £55m into the business.

According to reports the package would involve an underwritten share issue that would result in it owning a majority stake in Eddie Stobart.

The firm was forced to suspend its shares in the summer after it emerged an accounting error resulted in investors being misled over the value of the business.

According to reports the DBAY proposal is “a rescue proposal aimed at salvaging thousands of jobs”.

Haulage firm Wincanton is also looking to buy the business and has until Friday to make a firm offer.

The firm’s shares were valued at 160p when the company floated in 2017 but slumped to 71p when trading was suspended in August.

DBAY still owns around 10% of the company.

Eddie Stobart’s lenders recently called in Alvarez & Marsal to advise them on a potential restructuring.

According to reports the firm could be forced to go into administration if a rescue deal is not agreed.

Chief executive Alex Laffey has left the business and Sebastian Desmareux was named as his interim successor.

The crisis at Eddie Stobart has also played a part in fund manager Neil Woodford’s downfall. His investment firm owns more than 20% of the company.

A statement on the DBAY proposal was published this morning.

The statement read: “The board of Eddie Stobart Logistics notes the press speculation and confirms that it has received a proposal from DouglasBay Capital III Fund LP – a fund managed by DBAY Advisors Limited – to acquire a controlling interest in the group’s operations.

“Under the terms of the Proposal, the fund would acquire – directly or indirectly – a 51 per cent stake in a new entity which will become the holding company for the group’s operations.

“The company’s existing shareholders would have – via their shareholding in the Company – a 49 per cent interest in the Holdco.

“As part of the proposal, the fund would inject approximately £55m of financing into the group’s operations through a PIK loan instrument, which will be used to provide necessary liquidity.

“The board of Eddie Stobart is considering the Proposal together with its advisers.

“There can be no certainty that any binding transaction on the basis of the Proposal or other offer for the Company will be forthcoming. Any agreed Proposal would be subject to approval of the Company’s shareholders at a general meeting.

“A further announcement will be made as and when appropriate.”