The Brambles Limited (ASX: BXB) share price has come under pressure on Tuesday.
In morning trade, the logistics solutions company’s shares are down 7% to $10.75.
Why is the Brambles share price sinking?
Investors have been selling down the Brambles share price today following the release of an update on a takeover approach.
On Monday, the company confirmed speculation that it was in takeover talks with private equity giant CVC Capital Partners.
As we covered here, CVC was reportedly considering bidding around $20 billion for the pallet and container maker. Based on the Brambles share price at the time, this would imply a premium of ~30%.
However, Brambles advised that the “engagement is preliminary, incomplete and there has been no formal proposal received from CVC.” It went on to warn that there was “no certainty that the engagement will lead to a binding proposal being received from CVC.”
What’s the latest?
As you might have guessed from the Brambles share price reaction, today’s takeover update has not been a good one.
According to the release, CVC Capital Partners has decided to walk away from discussions with Brambles.
The company advised:
Brambles informs the market that CVC has today advised that it will not be putting forward a proposal nor seeking to conduct detailed due diligence at this time due to the current external market volatility. The engagement has therefore concluded earlier today.
What now?
As per yesterday’s announcement, the Brambles board and management team remain focused on implementing the Shaping our Future transformation plan.
This plan builds on the strength of Brambles’ sustainable business model to transform the business and unlock value for customers and shareholders.
Though, it will also continue to explore other options for the company that maximise shareholder value.
The post Brambles share price sinks 7% after takeover talks collapse appeared first on The Motley Fool Australia.
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More reading
- Here are the top 10 ASX shares today
- Why Brambles, Core Lithium, Infomedia, and Qube shares are charging higher
- ASX 200 midday update: Brambles rockets, Goodman upgrades guidance
- Here’s why the Brambles share price is rocketing 11% on Monday
- Brambles share price on watch as takeover talks confirmed
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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