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Highlights
- Brambles Limited's share price has plummeted by over 7% today (17 May).
- The company has provided an update on the acquisition proposal from CVC Capital Partners.
The palette and crates business of Brambles Limited (ASX:BXB) is in the news today (May 17, 2022) as well. After yesterday’s share price surge of over 11%, the BXB share plunged more than 7% today. While yesterday's gains were a response to a potential acquisition bid received by the company from CVC Capital Partners, things have changed entirely in just a matter of twenty-four hours. As a result, Brambles' share price has tumbled to AU$10.77 a share by noon today (16 May 2022).
Did Brambles accept the acquisition proposal?
CVC Capital Partners sent the acquisition proposal that came to light yesterday. However, today CVC has advised the opposite. As per Brambles' latest ASX release, CVC will not be putting forward any proposal for acquisition. Moreover, it will not seek any detailed due diligence for the acquisition. CVC's contradictory statement is reportedly based on the current external market volatility. Due to the unexpected turn of events, Brambles Limited and CVC Capital Partners' engagement concluded earlier today.
Meanwhile, Brambles' management board is, as disclosed in yesterday's announcement, focused on implementing its future transformation plans. The motivation for it is Brambles' recent performance improvement report and the resultant transformation plan. The management wants to focus internally on building up the strength of Brambles' 'sustainable business model'.
Brambles Limited’s share price performance on ASX
BXB's share price has reversed gains made by it in the recent past and the company’s share price is up only 6.83%. For a shareholder having BXB shares since the beginning of the year, BXB share has become slightly loss-making, down 0.51% on a YTD basis.
Image Source © 2022 Kalkine Media®, Data Source-ASX
Talking about distributions, Brambles' dividend policy targets a dividend payout ratio between 45-60% of its underlying profit after considering finance and tax costs.
More from ASX- ASX200 Gains 0.40% In Opening Trade As Energy Stocks Rise; Brambles Plunges 7%
A peek into Brambles' business model
Brambles Limited belongs to the supply chain and logistics industry and has operations in over 60 countries worldwide. Its operations are branded as CHEP, where it helps clients make their supply chain more efficient. The company's pallets, crates, and containers make it a part of the supply chain matrix of top global companies from various sectors. The company uses a share, and reuse approach called the sharing economy or 'pooling'. Brambles achieve this via a network of over 750 service centres and operational segments in the Americas, EMEA and the Asia Pacific region. Its clientele consists of fast-moving consumer goods, fresh produce, general manufacturing, and even retail sectors.
