Legal Brief
Exel up on takeover rumors
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Rumours are currently circulating that Exel Logistics may soon be subject to a takeover bid. Stock Market traders have been in buying mood, leading to heavy trading with 9.9m Exel shares changing hands, rather than the more normal 2.6m.
This activity left Exel shares reaching a year-end high of 782½p on talk that the US parcels behemoth UPS or perhaps Deutsche Post could be considering a bid for the company.
This share price values Exel at around £2.3bn. It's believed that UPS in particular is keen to increase its presence in the UK market and the acquisition of Exel would be a quick step towards that goal.
Market analysts argue that the logistics sector is overdue some consolidation, and a takeover by UPS would benefit the US company as it recently issued a profits warning blaming a sharp drop in shipping volumes.
A tie-up with Exel could generate substantial cost savings at UPS and could help reverse the group's fortunes.
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