(Bloomberg) -- CVC Capital Partners Plc is pressing the case for its takeover bid for Deutsche Bahn AG’s logistics arm DB Schenker with a fresh appeal to top officials at the German state-owned transport group.
The buyout firm sent letters Monday to Deutsche Bahn’s management and supervisory boards, according to copies seen by Bloomberg. CVC is appealing directly to the officials with the key points of its latest proposals after the German company signaled a preference for a competing offer from rival bidder DSV A/S.
In addition to CVC’s bid for a full takeover of DB Schenker, it has also proposed an alternative offer where Deutsche Bahn would reinvest €1 billion to keep a stake of up to 24.9%. CVC has now guaranteed that Deutsche Bahn would generate €2 billion to €2.5 billion of proceeds from the reinvestment on the remaining stake when CVC exits the investment, according to the letter. That means the alternative offer is worth at least €16 billion in total, they said, after both CVC and the Danish logistics company offered about €14 billion.
CVC argues that this alternative proposal would let Deutsche Bahn realize more value than a rival bid from DSV. The reinvestment option is preferred by employees representatives and follows a model CVC has used in previous investments including Evonik, the private equity firm wrote in Monday’s letter.
Verdi, Germany’s most powerful labor union, last month made the unusual move of backing the private equity firm’s bid for Schenker. DSV in response made additional job and investment pledges and Deutsche Bahn currently favors its bid because of the higher upfront payment, the people said.
A representative for CVC declined to comment.
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