A warehousing company that counts John Lewis, Marks & Spencer, Morrisons and Asda among its customers has agreed a possible takeover deal worth up to £940m with a New York rival, in the latest sign of the boom in online delivery.
The board of Clipper Logistics, headquartered in Leeds, unanimously recommended the possible takeover offer by New York-listed GXO Logistics of 690p a share plus shares in the Connecticut-based company worth up to 230p for each Clipper share.
Clipper’s shares jumped by 14% on Monday morning to 887p, near their record high of 910p.
Warehouses have become a huge growth business in the past decade, particularly during the coronavirus pandemic, as online shopping has accounted for an ever greater share of total spending.
The shift to online shopping accelerated even faster during lockdowns. Clipper serves fast-growing retailers such as Boohoo, Asos and JD Sports, and in the UK supermarket deliveries also expanded rapidly.
Clipper is mainly focused on clothing, with retailers outsourcing their online deliveries to the company, which manages stock and picks and packages clothes in its warehouses. It also handles clothing returns, an important and costly issue for fashion retailers.
Clipper, which claimed £3.8m from the UK government under the coronavirus job retention scheme, also benefited during the pandemic from the UK government’s massive spending on personal protective equipment (PPE), in deals that drew scrutiny because of Clipper founder Steve Parkin’s donations to the Conservative party worth £730,000. Clipper said it has processed more than 1bn PPE items during the pandemic and it described its newly created PPE unit as a “development opportunity” in its annual report.
Parkin, who holds 15% of the Clipper shares, has promised to vote in favour of the deal. Clipper and GXO said the deal offered a “highly attractive valuation”, with a premium of 49% compared with the day before the offer was made.
However, the premium was only 18% compared with Clipper’s closing price on Friday. Shareholders may be able to mix the proportion of shares and cash that they receive if a firm offer is made and they vote in favour.
Parkin started Clipper in 1992 with a single van delivering clothes for fashion retailers, according to the Yorkshire Post. Since then it has grown to 10,000 employees in 55 sites in the UK, Poland, Germany, Ireland, the Netherlands and Belgium.
GXO was part of another US warehouse and trucking company, XPO Logistics, until August when it was spun out and listed separately. It was worth $9.3bn (£6.8bn) at Friday’s market close.
