FRANKFURT/BERLIN, Sept 9 (Askume) – CVC (CVC.AS) is raising its bid for Deutsche Bahn’s logistics unit Schenker, with the private equity firm asking Deutsche Bahn’s board and supervisory board to fairly evaluate its offer, according to a letter.
The letter said that if the German government decides to remain an investor, CVC will provide Deutsche Bahn with a guarantee of at least 1 billion euros to prevent a possible withdrawal from the IPO in the future.
Deutsche Bahn wants to sell Schenker Bahn to focus on Deutsche Bahn’s struggling core business and reduce its debt load of more than 30 billion euros ($33.14 billion).
Last month, CVC made two bids , one for 100% of Schenker, valuing it at around 14 billion euros, and the other that included an option for Germany to reinvest in a minority stake, thus raising the offer to 16 billion euros.
CVC’s Schenker proposal was “neither elaborated on nor discussed” at a special steering committee meeting on the sale on Sept. 6, the letter said.
The investment group’s bid is backed by a consortium of Singapore’s sovereign wealth fund GIC, Abu Dhabi Investment Authority (ADIA) and Qatar Investment Authority (QIA), which will act as the equity provider in the deal, the letter said.
A Deutsche Bahn spokesman said: “The most important criterion is that the sale must be economically beneficial for the railway.”
He added: “The decision to sell DB Schenker will be submitted to the supervisory board of Deutsche Bahn for final approval at the end of the process. It will also require federal approval.”
Sources told Askume last week that CVC, which declined to comment, was seeking funding from Danish freight forwarder DSVIt was competing against a rival bid for Schenker from DSV.CO. , which had a slight edge in its bid.
DSV’s offer for the whole of Schenker also values the company at around €14 billion.
German union Verdi warned against selling Schenker to DSV in a positioning document last month , fearing the proposed merger could lead to job losses.
Schenker has around 15,000 employees in Germany and more than 70,000 employees worldwide.
A steering committee made up of state secretaries from the German governing coalition discussed the sale last week. The government minister responsible for the sale of the letter to the state-owned rail company is believed to have a key role.
“In an increasingly challenging economic and geopolitical situation, Germany cannot afford to lose another strategically important domestic industrial leader,” CVC said in the letter.
(1 USD = 0.9051 EUR)
