* Brambles shares jump as much as 13.3%
* Deal could be among Australia's largest PE-backed
* Expect at least a A$13/share offer - Citi analysts
* Brambles also mulling "strategic options"
May 16 (Reuters) - Brambles Ltd said on Monday it
was evaluating a potential https://www.afr.com/street-talk/cvc-capital-partners-in-bid-to-get-australia-s-brambles-20220201-p59sug
A$20 billion ($13.89 billion) takeover offer from Europe's CVC
Capital Partners, becoming the latest Australian corporation to
land in the crosshairs of private equity.
Shares of Brambles, which had a market valuation of A$16.65
billion at Monday's end, soared as much as 13.3% to an
eight-month high of A$11.82 during the session. The stock saw
its best single-day performance in 19 years.
If successful, the deal could be one of the biggest private-
equity-backed takeovers in the country, rubbing shoulders with
U.S. private equity giant KKR & Co's $14.8 billion play
for hospital operator Ramsay Health Care.
Canadian PE firm Brookfield Asset Management has
also made bids for AGL Energy, Uniti Group and
LaTrobe Financial so far in 2022. Earlier, Sydney Airport was
bought out for $17.4 billion a consortium that included
Australian pension funds.
Brambles, which rents crates and pallets globally to
fast-moving consumer goods companies including retailing giant
Walmart, is well-positioned to benefit from the current
crunch in container availability amid a pandemic-fuelled boom in
"They have a catalyst coming up in terms of whether to
embrace plastic pallets and move away, in some respects, from
timber pallets, as Walmart goes that way," said Henry Jennings,
senior analyst and portfolio manager at Marcustoday Financial
"That's , I guess, a bit of a catalyst for private equity to
have a look at that."
The company has also received some investor ire for its
proposal to build a plastic pool for its customers, including
big-box retailer Costco, in the United States.
Brambles said the engagement was "preliminary" and that it
had received no formal proposal from CVC. It did not put a
number on the deal.
A spokesperson for CVC Capital Partners declined to comment.
A local newspaper pinned the deal value at A$20 billion,
including debt, while analysts at Citi said CVC may have to pay
at least A$13 a share, bringing the total deal value to about
A$19 billion, as per levels at Monday's close.
In its April trading update, Brambles had flagged headwinds
from supply chain constraints amid the Russia-Ukraine conflict
and rising inflation that will affect its outlook for the next
"The board is also considering other strategic options for
the company that maximise shareholder value," it said on Monday.
($1 = 1.4403 Australian dollars)
(Reporting by Savyata Mishra and Harshita Swaminathan in
Bengaluru; editing by Jonathan Oatis, Subhranshu Sahu and Maju