Australia's Brambles ends takeover talks with CVC Capital

Australia's Brambles Ltd said yesterday European private-equity firm CVC Capital Partners has ended preliminary talks with the company over a potential AU$20 billion (US$14 billion) takeover offer, citing external market volatility.

The development comes a day after the Australian logistics firm confirmed it was evaluating the offer, which would have been one of the biggest private-equity-backed takeovers in the country. It had not put a number on the deal.

Shares of Brambles dropped 6 per cent to AU$10.9 by 00.09 GMT yesterday. They had soared 11.2 per cent on the previous day, giving it a market valuation of AU$16.65 billion at the close of trading.

The company said CVC will not be putting forward a proposal or seeking to conduct a detailed due diligence at the moment due to the "current external market volatility", without divulging further details.

Global markets have experienced wild volatility in recent months as COVID-19 restrictions in some countries and Russia's military operation in Ukraine since February blocked supply chains and sent energy prices soaring.

Brambles, which rents crates and pallets globally to fast-moving consumer goods companies including retailing giant Walmart, hiked its annual underlying profit expectations last month to 6 per cent-7 per cent on prior year.

A pandemic-fuelled boom in e-commerce activity and a current crunch in container availability has placed the group's business in a favourable position, making it an attractive target for buyout firms.

CVC, which had been missing from Australia after a AU$1.8 billion loss on its investment in Nine Entertainment in October 2012, did not respond immediately to a request for comment.