French shipping group CMA CGM is offering 5 billion euros ($5.48 billion) for the logistics unit of Bollore, the family-run conglomerate said on Tuesday.
For Bollore a deal would mean cutting ties with its biggest business while offering cash-rich CMA CGM a chance to bolster its bid to offer end-to-end transportation services and supply chain management.
The business posted more than 7 billion euros in revenue last year and has 15,000 employees.
News of the indicative offer, made on a cash free and debt-free basis, boosted Bollore’s shares.
Bollore disclosed it following a report in shipping publication Le Marin.
Bollore said in a statement that it had agreed to enter into exclusive talks with CMA CGM until May 8.
It said a successful transaction would hike the offer price for its buyback program by 25 euro cents per share.
CMA CGM, privately controlled by the founding Saade family, has seen its earnings surge in the past two years on high freight rates and saturated supply chains.
It has used the profits to support an investment spree, including a stake in Air France-KLM, and, like its shipping rivals, has expanded in logistics.
Bollore, run by the family of billionaire Vincent Bollore, sold its Bollore Africa Logistics business last year to shipping company MSC Group for 5.7 billion euros.
A sale would raise questions about how Bollore uses the proceeds, as it would significantly shrink the scope of the conglomerate, which would be left assets such as Bollore Energy, a distributor of petroleum products in France.
Bollore is also top shareholder in French media giant Vivendi, home to pay-TV group Canal Plus, and holds a 18% stake in Universal Music Group.
Source: Reuters.com