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Eddie Stobart suitor appeals to watchdog over DBAY bid

by ace
An Eddie Stobart lorry

A bitter fight for the future of one of Britain's largest distribution companies will draw the attention of the city's merger authorities on Monday, just days before shareholders voted for a controversial takeover bid.

Sky News has learned that advisers to Andrew Tinkler, former head of Eddie Stobart Logistics during his tenure at Stobart Group, appeal to the Procurement Panel to prevent DBAY Directors from voting on December 6 to favor of your own redemption offer.

Sources said on Sunday night that Tinkler's vehicle, TVFB, acquired a 6.5% stake in Eddie Stobart Logistics on Friday in an effort to build momentum behind its own refinancing proposal.

The developments represent the latest twists in an unexpectedly complex battle for control of a company that has been embroiled in financial crises and scandals for months.

Without some form of bailout refinancing, Eddie Stobart Logistics – best known for its vast fleet of red and green trucks – will collapse weeks before Christmas, endangering 6,000 jobs and hundreds of thousands of festive deliveries.

TVFB wants the Procurement Panel to decide that DBAY and William Stobart, who are acting together, are barred from voting for the approximately 30% stake they hold collectively.

In total, they need just over 50% shareholder approval to secure their business, which will involve acquiring control of Eddie Stobart Logistics' assets in return for a £ 55m loan.

DBAY's proposal has the backing of the company's creditors and gained support from proxy consultants, but it attracted a furious response from independent shareholders who would have little value from their business stakes.

It was unclear whether the Procurement Panel would attempt to intervene because DBAY's proposal involves an offer for Eddie Stobart Logistics's assets rather than its share capital.

The DBAY plan would keep the company listed but without exposure to Eddie Stobart Logistics' existing assets.

Eddie Stobart Logistics said on Friday its lenders were not prepared to extend financing to the company to allow Tinkler or any other competitor to make an offer.

Rival carrier Wincanton withdrew its interest in the acquisition of Eddie Stobart Logistics last week, citing its inability to judge the company's value without accurate financial information.

The company's shares were suspended at 70p during the summer with PricewaterhouseCoopers, its auditor, unwilling to sign its half-year results amid evidence of accounting irregularities.

Sources that his results from several previous years – when DBAY was the business owner – would also need to be restated.

Under the TVFB proposal, Mr. Tinkler would be installed as CEO of Eddie Stobart Logistics, with the company continuing to be listed on the London Stock Exchange.

TVFB is expected to say in an announcement on the stock market Monday that it would sponsor a £ 80m stock offering that would allow smaller shareholders to participate at a price of 5p per share.

This compares to the £ 55 million in liquidity that would be provided by DBAY.

However, even if Tinkler gets investor support for his plan at AGE on Friday, Eddie Stobart Logistics's creditors will still be able to hand over the company to DBAY, forcing it through a pre-package management process.

DBAY's effort to take control of Eddie Stobart Logistics is controversial because the investor reaped a huge profit by launching the company at 160p-a-share in 2017.

Eddie Stobart's creditors recently recruited from Alvarez & Marsal (A&M) to advise them on restructuring.

Deloitte is working alongside Rothschild bankers in discussions about the company's future.

Eddie Stobart had net debt of around £ 155 million in the half, with some TVFB fundraising proceeds being used to reduce these loans.

DBAY Advisors bought 51% of Eddie Stobart from Stobart Group when Tinkler ran the combined entity five years ago.

Eddie Stobart's downfall in the crisis led to the expulsion of his chief executive, Alex Laffey, and the installation of Sebastian Desmareux as his interim successor.

Mr. Tinkler, who was supported by a combination of new and existing shareholders from Eddie Stobart Logistics for his proposal, still owns about 5 percent of Stobart Group, owner of Southend Airport.

Complicating matters, the Stobart Group, which allegedly supports TVFB's proposal, also has an economic interest in its former sister company.

The TVFB declined to comment Sunday night.

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