Businessman moves to block controversial Stobart rescue bid
Businessman Andrew Tinkler has moved to block a controversial rescue bid for struggling haulage firm Eddie Stobart.
The firm has warned it is in danger of collapsing if the rescue bid fails to go through.
Shareholder DBay Advisors is bidding to buy the Warrington firm in a cut price deal.
The deal would see DBay inject £55m into the firm but shareholders are set to lose out on their investment.
The rescue bid has been accepted by the Stobart board and a rival bid from haulier firm Wincanton has been dropped.
Andrew Tinkler
However, according to reports Mr Tinkler is planning to submit an appeal to the City mergers watchdog to block a shareholders vote on the deal.
And this mornin Andrew Tinkler launched an alternative offer through his firm TVFB.
The appeal to the Takeover Panel is an attempt to prevent Dbay Advisors from voting on 6 December.
Andrew Tinkler, who was embroiled in a bitter takeover battle at sister firm Eddie Stobbart Group last year, has reportedly acquired a 6.5 per cent stake in Eddie Stobart Logistics through TVFB.
TVFB is hoping the Takeover Panel will decide to block Dbay and William Stobart from voting their combined stake, which is around 30 per cent.
The controversial needs approval from more than 50 per cent of shareholders to pass.
Mr Tinkler hopes to get shareholder support for a rival offer, involving a £70m to £80m equity raise backed by existing shareholders and new investors.
Eddie Stobart, which is known for its green liveried lorries, has secured a waiver from lenders Allied Irish Bank, Bank of Ireland, BNP Paribas and KBC – which are owed a combined £200m – relating to breaches of its credit facility until 13 December.
The firm’s shares have been suspended since the summer after it emerged there were serious accounting discrepancies and a £2m black hole in its accounts.
The logistics company has warned it will face an “imminent liquidity shortfall, imminent expiry of the waiver and no support from the lenders to explore alternative options” if the vote on Friday fails.
A lengthy statement was released this morning by TVFB.
It read: “TVFB’s Proposal, involves an issue of equity by ESL, predicated on the appointment of Andrew Tinkler as executive chairman of the company.
“Following the higher than expected demand and support from shareholders, TVFB will upsize the fundraising from £70 million of commitments up to £80 million.
“We intend to make an open offer of up to £6 million to allow all shareholders to participate in the fundraise. We would encourage D-BAY, as a significant shareholder to participate in the fundraising and support the business.
“Funds received would be put towards the implementation of a business plan for ESL based on operational efficiencies, and using the expertise of Andrew Tinkler, who was chairman of Eddie Stobart and chief of the Stobart Group between February 2004 and July 2017, coupled with the existing ESL executive management team.
“This business plan has been shared with the board of ESL. Any surplus would be used to reduce the leverage in ESL and we expect up to £30 million of equity to be used to prepay the Term Loan.”
The TVFB proposal would leave ESL as an independent, listed company, run by Andrew Tinkler.
The statement added: “We believe the full consequences of D-BAY’s proposal have not been fully highlighted by the board of ESL or D-BAY themselves.
“Shareholders in ESL should note the statement that existing ESL shareholders are retaining a residual 49% interest is correct only immediately post completion.
“D-BAY’s stated intention is to use ESL, after reclassification to an AIM investing company, as the vehicle to fulfil its pan-European private equity aspirations.
“As an investing company, a further £6 million would need to be raised to avoid a de-listing.
“In light of this, and unless ESL Shareholders are prepared to continue injecting what could be substantial sums of money into a vehicle under the full operational and board control of D-BAY, they risk being materially diluted on an ongoing basis.
“D-BAY indirectly owned ESL between 2014 and 2017, listing it in April 2017 with a market capitalisation of £572 million, having received in excess of £150 million in cash as part of the float and retaining a significant stake, making them the second biggest shareholder at the time.
“Under D-BAY’s ownership, a strategy was implemented that has resulted in over-gearing and a reduction of operating margins. TVFB would note that the Board of ESL is recommending a proposal that hands control of ESL back to D-BAY at no meaningful value to the current shareholders.
“We are focused on protecting shareholders and preserving their value in ESL.
“D-BAY announced on 29 November 2019 that it had acquired shares representing 17% of the issued share capital of ESL, increasing its shareholding to 27%. We understand that the price per share at which these shares were acquired was 6 pence.
“TVFB believes that this action was wholly hypocritical, given that the D-BAY proposal does not afford any meaningful value to other shareholders.
“We maintain that these shares were acquired solely to increase D-BAY’s chances of passing Resolution 1, and to increase its level of control in the event of its passing, to the detriment of other ESL shareholders.
“TVFB today announces that it acquired 24,708,287 shares in ESL at a price of 6 pence per share. This is wholly consistent with the TVFB Proposal that it intends to make to ESL shareholders and is indicative of our belief in the prospects of ESL as an independent listed company.”
