(Bloomberg) -- DSV A/S received commitments from investors for more than half of a €5 billion ($5.5 billion) sale of new shares as the Danish freight-forwarding company finances its takeover of DB Schenker.
DSV will sell the stock in an underwritten directed issue and private placement to help fund the €14.3 billion deal, the company said on Thursday. The targeted amount compares with a range of €4 billion to €5 billion, which DSV set on Sept. 13.
The shares were being marketed at 1,400 to 1,410.5 kroner each in the accelerated bookbuilding process, according to terms seen by Bloomberg, which showed there was enough investor demand to cover the entire deal shortly after it launched. That represents a 0.74% discount to Thursday’s closing price at the bottom end.
The share sale comes just one day after Deutsche Bahn AG’s supervisory board approved the divestment of its logistics unit, despite resistance from German labor unions and late attempts by a rival bidder to derail the deal. DSV, which has grown through a string of large acquisitions, has built a reputation as a successful integrator of its targets and its share price has gained almost 20% since late August on expectations it would secure the DB Schenker transaction.
DSV has received cornerstone commitments for about 21 billion kroner ($3.1 billion) in aggregate, it said. Those include $1.1 billion from funds and accounts managed by BlackRock Inc. Capital Group agreed to invest $700 million, Canada Pension Plan Investment Board committed €600 million and Norway’s sovereign wealth fund is subscribing to $400 million worth of stock.
BNP Paribas SA, Danske Bank A/S, HSBC Continental Europe, JPMorgan Chase & Co and Nordea Bank Abp will help DSV arrange the sale.
DSV, which has an A- credit grade, has also said it would tap the debt market for some of the financing. The deal will make DSV the world’s largest freight-forwarding company, doubling its labor force to almost 150,000 people, and turn it into Denmark’s second-largest company by revenue.
DSV, which is based outside of Copenhagen, also published preliminary third-quarter earnings on Thursday and raised the lower end of its 2024 profit guidance range.
--With assistance from Pablo Mayo Cerqueiro and Niclas Rolander.
(Updates with price guidance in third paragraph.)
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