Deal worth £75m should prevent company from going bankrupt before Christmas
Eddie Stobart employs 6,500 workers and is only a few months shy of its 50th birthday.
Photograph: Christopher Thomond/The Guardian
Eddie Stobart, Britain’s best-known haulage company, will be bailed out by its former owners after shareholders voted in favour of a private equity-style takeover.
Douglas Bay Capital (DBay), an Isle of Man-based investor, together with the lorry driver’s son William Stobart, will take control of Eddie Stobart’s green and red lorries and other assets. The £75m bailout should prevent the company from going bankrupt before Christmas, and allow it to repay some of its £200m debt.
In a statement to the stock market, Eddie Stobart Logistics said shareholders had voted “overwhelmingly” in favour on Friday. Figures showed 81% of voting shareholders approved the deal, which is expected to close as soon as Monday.
Sébastien Desreumaux, Eddie Stobart’s chief executive, said: “The proposed transaction provides Eddie Stobart with the opportunity to move forward and look to deliver sustainable growth and profitability from a stable footing. Our main priority and focus is now continuing to deliver the high levels of services expected by our customers as we move into the busy Christmas period.”
Stobart’s customers include Tesco, Coca-Cola and Amazon.
The deal represents a victory for William Stobart over his ex-brother-in-law and the company’s former chief executive, Andrew Tinkler, who had mounted a rival £80m bid to take over Eddie Stobart with the backing of unnamed investors. The childhood friends have taken turns to run the company at various points in its recent history.
Tinkler was present at a short shareholder meeting on Friday morning in London. He spoke briefly against the DBay bid, asking the haulage company’s chairman, Philip Swatman, if he had fully explored every option. Sources in the public company’s meeting – from which journalists were barred – said his tone was calm.
“The Eddie Stobart business has been a great source of personal pride for me ever since I was first employed to wash and maintain the trucks in the early 1980s, through to being CEO from 2004 to 2014,” Tinkler said.
“I hope the company can return to its former glory and the board continue to work in the interests of all stakeholders to help this iconic business thrive again.”
The vote offers a short-term reprieve for Eddie Stobart’s 6,500 workers, who had faced the prospect of a collapse into administration shortly before Christmas. The company, which has a fan club and a dedicated Channel 5 TV series, is months shy of its 50th anniversary.
Unions said they were seeking urgent discussions over the future of the workforce, although a person familiar with DBay’s intentions insisted it had no plans for job cuts.
Adrian Jones, a national officer for road transport at Unite, said the workers represented by the union were very anxious about their employment.
“The new owners need to be fully aware that Unite will not allow profits to be ramped up at the expense of our members’ jobs, pay or conditions,” he said.
In a statement, DBay said: “Eddie Stobart’s loyal staff are the best in the industry and we are pleased to be able to provide certainty over their jobs throughout the Christmas period and beyond.”
However, DBay faces a battle to secure Eddie Stobart’s long-term future. The Warrington-based company recorded a loss of at least £12m in the first half of the financial year, although accounting problems revealed in August mean it could be much worse.
DBay’s return to control, via an unorthodox 51% stake in Eddie Stobart’s operating subsidiary, comes less than three years after it made £150m from a flotation that valued the haulage company at £573m.
The company’s value had fallen to less than £270m by August, when shares were suspended. DBay has since bought shares previously owned by Neil Woodford for 6p each – implying a market value of just over £20m.
Eddie Stobart’s board had insisted DBay’s offer was the only one that would prevent its banks – AIB, BNP Paribas, Bank of Ireland and KBC – from foreclosing on loans. The board had claimed this would have pushed the company into administration almost immediately.
Quicker-than-expected approval for the deal from the City regulator means DBay will shortly start receiving interest at an annual rate of 18% on £55m in loans to the company. There will also be another £20m of available credit from the banks.