September 30, 2024 07:59 GMT
DSV (DSVDC; A3 Stable/A- Neg) Schenker union opposes sale
TRANSPORTATION
Leaks are the EVG union will vote against the transaction at DB's supervisory board meeting on Wednesday. It's resistance in isolation is (reportedly) not enough to block the board approval.
- Reminder during the bidding process the powerful and larger union, Verdi, backed the CVC led PE consortium - yet they lost. We see the two-year employee protections DSV agreed to as addressing some of the concerns.
- The union boss goes on to say there is "no guarantee that proceeds from the transaction would be used to reduce Deutsche Bahn's debt" - it might set records for IG-rated leverage if it doesn't send cash straight back to the balance sheet and stated indication is it will.
- He also complains "management board are portraying the sale of our crown jewels as strategy" - we sympathise with this view, S&P not so much.
Reminder DSV has DB's management board approval, supervisory coming up and then finally government approval. We would be weary of pricing any of the supply risk out and equities are not worried this morning (has seen Schenker purchase as favourable). Our assumptions are unch; €5-6.5b in supply across TL and €bonds and no immediate rating downgrades.
Source article here
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