Daily Brief Industrials: Chilled & Frozen Logistics Holdings, Wincanton PLC, Organo Corp, Porvair PLC, Steelcase Inc Cl A, Braemar Shipping Services PLC and more

• Chilled & Frozen Logistics Holdings (9099 JP) last week announced its “Action to Implement Management That is Conscious of Cost of Capital and Stock Price”.
• Today it announced AZ-Com Maruwa Holdings (9090 JP) had announced its intention to launch a Tender Offer on C&F Logistics without having contacted C&F first. A HOSTILE deal. Yum.
• The deal is proposed at a 50% premium, with the goal of getting to a minimum of 50.00%. This will be interesting.

• AZ-Com Maruwa Holdings (9090 JP) has launched a pre-conditional hostile offer for Chilled & Frozen Logistics Holdings (9099 JP) at JPY3,000 per share, a 47.0% premium to the last close.
• The pre-conditions primarily relate to regulatory approvals. The tender is expected to start in early May. The Board responded that it will evaluate the offer.
• The hostile offer was a reaction to the Board’s lack of engagement. The Board will struggle to reject an attractive offer, which is 37.5% higher than the all-time high. 

• GXO Logistics (GXO US) offers 605p for Wincanton PLC (WIN LN), in a strategic move worth a 104% premium, 8.6x EV/25e EBITDA, 18.2 Fwd P/E (IBES), via scheme with 34% irrevocables.
• Regulators are used to monitoring this industry, gradually consolidating on a worldwide scale as a result of cost pressures. GXO has smaller scale in the UK. 
• I don’t think antitrust issues are going to prevent this transaction. Interloper risk is minimal (DHL, Deutsche Post would have regulatory issues). Spread is 1.00%/7.14% (gross/annualised). Long.

• As a comprehensive water treatment engineering company, Organo Corp (6368 JP) engages in the planning, design, procurement, construction, operational management, and maintenance of water treatment plants.
• In FY03/23, orders received were JPY173.5bn, revenue was JPY132.4bn, operating profit was JPY15.2bn, recurring profit was JPY16.0bn, and net income attributable to owners of the parent was JPY11.7bn.
• Organo Corporation announced revisions to its full-year forecast for FY03/24.

• Porvair plc is a specialist filtration, laboratory and environmental technology company.
• The Company’s operating divisions include Aerospace & Industrial, Laboratory, and Metal Melt Quality.
• The Aerospace & Industrial division designs and manufactures a broad range of specialist filtration equipment for applica- tion in aerospace and industrial applications. 

• After the close Wednesday, Steelcase reported 4QFY24 non-GAAP adjusted EPS of $0.23, ahead of our $0.22 estimate and consensus of $0.21.
• 4QFY24 global revenue was $775 million, modestly missing our estimate by ~$9 million.
• FY24 non-GAAP adjusted EPS was $0.93, up from $0.56 in FY23, and revenue was $3.16 billion, down 2.6%.

Braemar’s FY24 trading update was in line with expectations, with revenues of c £150m and underlying operating profit of c £18m. Underlying operations continue to expand and diversify and the company remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying estimates for FY24 and FY25, but edge down the valuation based on the lower FY24 dividend expectations. The revised valuation offers nearly 100% upside.