CP Ships keen to accept TUI’s R14.7bn offer

JOY ORLEK HAPAG LLOYD parent company TUI has emerged as Canadian CP Ships’ preferred suitor. The CP Ships board of directors this week unanimously recommended that shareholders accept an offer from TUI to acquire the company in an all-cash transaction for about $2.0 billion (R12.8 bn). Including the assumption of net debt of $0.3 billion at June 30, the transaction has a total value of $2.3 billion (R14.7bn). TUI, Europe’s largest tour operator, plans to combine Hapag-Lloyd and CP Ships to create the world’s fifth-largest container shipping company with a fleet of 139 ships (and a further 17 on order) for a capacity of approximately 400 000 TEU on over 100 routes spanning the globe. CP Ships subsidiary Lykes Lines has operated on the US – SA route for over 50 years. In contrast to the recent competition issues that arose with the APM Maersk takeover of P&O Nedlloyd, particularly on the SA – Europe route, the CP Ships takeover will have minimal impact on local shippers. Hapag Lloyd’s container shipping operation, with 57 container ships, primarily supplies the main routes between Europe and Asia, Europe and North America and North America and Asia. One shipping line executive believes it could be a ship-buying exercise. It could also be part of a normal business cycle, according to Nolene Lossau, of the SA Shippers’ Council - a merger/acquisition phase likely to be followed by consolidation. Cargo Info hands over exclusive travel prize