Private equity firm DBAY has called for the backing of Eddie Stobart shareholders ahead of a crunch vote over its £55 million bid to buy the trucking firm, saying the move is needed to “safeguard jobs”.
Douglas Bay Capital Fund (DBAY) has agreed the move to buy a 51% stake and take control of the Carlisle-based logistics firm.
It said it was highlighting its commitment to Eddie Stobart after buying more shares to take its current stake in the business to 29.9% ahead of a vote on the deal on Friday December 6.
The message follows reports that rival bidder Andrew Tinkler, the former boss of Stobart Group, will lodge an appeal with the Takeover Panel aimed at preventing the crucial vote taking place later this week.
The DBAY team has spent months working with the company and its lenders to put forward a proposal that provides a realistic opportunity to save the equity value in Eddie Stobart, while safeguarding jobsDBAY
Last week, Mr Tinkler’s vehicle, TVFB, said it had shareholder backing for a £70 million refinancing deal to save the distribution firm.
On Monday, TVFB said that it would increase the size of its proposed funding injection to £80 million in search of a deal.
But the board of Eddie Stobart has continued to urge shareholders to give their backing to DBAY’s offer or risk the firm going bust.
There are fears that without some form of rescue financing soon, the company could be on the brink of administration over Christmas, putting thousands of jobs at risk and causing major disruption to deliveries.
In its update to the stock market, DBAY said that other interested parties have been “unable or unwilling to submit any concrete workable alternative so far”.
It also claimed that the Eddie Stobart board will be faced with an “immediate liquidity shortfall” if the proposal is voted down.
In a statement, DBAY said: “The DBAY team has spent months working with the company and its lenders to put forward a proposal that provides a realistic opportunity to save the equity value in Eddie Stobart while safeguarding jobs.
“DBAY has a long and successful history with the business and it is with regret that we will be returning under these circumstances.
“Our belief in Eddie Stobart is reflected in the considerable effort we have put in to deliver a practical proposal and our decision to invest further, despite the problems it has faced since we stepped back from the board.”