Loxam, Europe’s largest equipment rental company, has made a preliminary cash offer to acquire Lavendon Group Plc. one of the U.K.’s leading equipment rental company. The acquisition would dramatically strengthen Loxam’s position in the U.K., Europe and the Middle East. However, Lavendon, which less than a week ago turned down an acquisition offer from TVH Group, a Belgium-based manufacturer, rebuffed Loxam’s offer, possibly setting the stage for a bidding war for Lavendon.
Loxam asked Lavendon’s shareholders not to act on TVH’s offer, stating that it was in talks with Lavendon’s management. Loxam, which hasn’t revealed the size of its preliminary cash offer, also said it has not made a definitive bid and might not necessarily do so. TVH offered about $435 million to acquire Lavendon, which has operations in the U.K., Germany, Belgium, France, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Already one of the world’s largest rental companies, acquiring Lavendon would significantly boost Loxam’s position in those countries.
According to International Rental News, Loxam posted rental volume of €838 million in 2015. Lavendon, which reported rental volume of €328 million in 2015, also posted revenue and profit upticks in the nine months of 2016, with a particularly strong performance in the Middle East. Lavendon said earlier this month that its full-year performance would be ahead of expectations.
Lavendon also asked its shareholders not to act on Loxam’s offer.
Loxam, meanwhile, has also begun negotiations to acquire Spanish rental company Hune, the country’s second largest rental company, with annual revenues of about €70 million. Hune has 35 branches in Spain, so combined with the 11 branches Loxam already has there, Loxam would become a major power in the Iberian peninsula. Hune also has rental businesses in Portugal and France, and joint ventures in Saudi Arabia and Colombia.