Just two months after announcing it was exploring strategic alternatives, including selling off one or more of its business units but keeping its LTL services intact, the company pulled this option off the table due to the effects of the coronavirus on markets.
“In light of current market conditions, XPO has terminated the strategic review process,” XPO noted in a brief, one-line 8k filing with the Securities and Exchange Commission.
XPO had been looking at its divestiture options after a two-year, $8 billion acquisition spree, based on dissatisfaction with its share price relative to pure-play LTL competitors, said CEO Bradley Jacobs in a release.
“The share price has increased more than tenfold since our investment in 2011,” Jacobs said. “Still, we continue to trade at well below the sum of our parts and at a significant discount to our pure-play peers. That’s why we believe the best way to continue to maximize shareholder value is to explore our options, while remaining intensely committed to the satisfaction of our customers and employees.”
XPO had retained Goldman Sachs and J.P. Morgan Securities as financial advisors, and Wachtell, Lipton, Rosen & Katz as its legal advisor to assist with the review process, looking to sell up to four of its business units. In addition to LTL, XPO has units focused on supply chain and transportation solutions that encompass intermodal and drayage, full truckload, freight forwarding, last-mile delivery and managed transportation.
Most recently, XPO said earlier this month it was acquiring a major part of 3PL Kuehne & Nagle’s contract logistics business in the UK for an undisclosed sum. The acquisition will add 75 facilities “and a blue-chip customer base” while integrating with its European network, the company said. It’s expected to close in the second half of 2020.