Report
Expert Corporate Governance Service (ECGS)
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De Sammensluttede Vognmænd (DSV) - EGM 27 May 2019

In general, De Sammensluttede Vognmaend (DSV) is in compliance with the Danish regulations relating to the organisation and procedures of the Extraordinary General Meeting.

Under ITEM 1, the board of directors seeks authorisation to issue shares in connection with the pending acquisition of Switzerland-based Panalpina Welttransport AG ("Panalpina"). In aggregate, the authority requested is limited to 30% of DSV's share capital and shareholders' pre-emptive rights may be waived. As a matter of principle, ECGS assesses capital increases for a specific purpose on a case-by-case basis. Under the transaction, DSV will offer 2.375 company shares for one Panalpina share. As such the transaction has an enterprise value of CHF 4.6 billion (DKK 30.5 billion). ECGS endorses the strategic rationale for the acquisition. The combined company will have access to a strong global network and an enhanced service offering further solidifying its position in the transport and logistics industry. On the other hand, ECGS deems the acquisition price of CHF 4.6 billion; corresponding to hefty multiples of 15.9x EBITDA, 38.9x EBIT and 56.6x Price-To-Earnings; too much of a good thing. ECGS furthermore considers the acquisition to be potentially highly dilutive for the Company's shareholders since Panalpina's Price-To-Earnings ratio of 56.6x is way above that of DSV (27.8x as of May 8, 2019). In view of the above, ECGS recommends to vote OPPOSE.

Underlying
DSV Panalpina

DSV is engaged in the provision of transport and logistics solutions. As of Dec 31 2014, Co.'s operations comprised of three business areas. The DSV Air and Sea business provides air and sea freight services and designs project solutions. The DSV Road business provides road and rail transport services including full loads, part loads and groupage. The DSV Solutions business area specializes in contract logistics, which include logistic and warehousing solutions, as well as freight management, custom clearance, order management and e-commerce solutions.

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Proxinvest
Proxinvest

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Expert Corporate Governance Service (ECGS)

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