Milk shakes at Wincanton

Activist investor Gatemore Capital Management has called for Wincanton to sell one of its two divisions and a shake-up of the company famous for its milk tankers. Gatemore has recently built up a stake in the UK logistics company.

According to Gatemore, Wincanton is “a sleeping giant whose intrinsic value is underestimated by the market,” according to a letter seen sent to Gatemore’s shareholders seen by Reuters.

Wincanton started out as a milk distribution business in 1925 and has grown to be a large haulage and warehousing company running a fleet of around 3,600 vehicles.

The haulage and warehousing company has two main divisions – one is a retail business supplying grocers and general retailers, while the other is a construction and transport business handling industrial products including bricks and fuel.

It is in a bit of trouble, with the Wincanton retirement scheme having a deficit of £69.3 million at the end of September. Gatemore believe that a sale of one of the divisions would recoup this.

“We have engaged in constructive discussions with Wincanton’s management and, in private, are calling for the company to conduct a strategic review, sell one of its two divisions, fund the pension, and refocus the business,” Liad Meidar, Gatemore’s managing partner, wrote in the letter.

“In due course, we will discuss our ideas with other large shareholders and seek their support in promoting productive change in the company.”

Wincanton refused to discuss the matter in public.

Gatemore have track record in logistics – as Apex Insight reported through last year it was heavily involved in the shakeup and rebuilding of DX Group. The activist investor company may well be about to do similar to Wincanton…